expectation damages, the objective theory of contracts

Kentucky Law Journal

Volume 99 | Issue 2 Article 4

2010

Expectation Damages, the Objective Theory ofContracts, and the "Hairy Hand" Case: A ProposedModification to the Effect of Two ClassicalContract Law Axioms in Cases InvolvingContractual MisunderstandingsDaniel P. O'GormanBarry University

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Recommended CitationO'Gorman, Daniel P. (2010) "Expectation Damages, the Objective Theory of Contracts, and the "Hairy Hand" Case: A ProposedModification to the Effect of Two Classical Contract Law Axioms in Cases Involving Contractual Misunderstandings," Kentucky LawJournal: Vol. 99 : Iss. 2 , Article 4.Available at: https://uknowledge.uky.edu/klj/vol99/iss2/4

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Expectation Damages, the Objective Theory ofContracts, and the "Hairy Hand" Case: A ProposedModification to the Effect of Two Classical ContractLaw Axioms in Cases Involving Contractual

Misunderstandings

Daniel P O'Gorman'

"Now, Mr. Hart, what sort of damages do you think the doctor shouldpay?" 2

INTRODUCTION

W HEN established legal doctrine is applied to the facts of a case andthe result appears unjust, a modification of or exception to the legal

doctrine should be considered.' A review of the facts of contract law's mostfamous "expectation damages" case-Hawkins v. McGee4-shows that thecourt's application of established doctrine resulted in an unjust decision.

i Assistant Professor of Law, Barry University School of Law. JD, cum laude, New York

University, 1993; BA, summa cam laude, University of Central Florida, 1990. I would like tothank Helen Huntoon of the New Hampshire Superior Court, Coos County; Joan L. Gearin,

Archivist at the National Archives and Records Administration, Northeast Region; Dr. Linda

Upham-Bornstein; M. Susan Sacco; and Eang Ngov for their help during the preparation of

this Article. I would also like to thank Douglas Baird for answering the numerous (and often

lengthy) contracts questions I have had over the past two years and for the advice provided

by Randy Barnett on teaching contract law at the American Association of Law Schools' New

Professor Workshop.

2 JOHN JAY OSBORN, JR., 'ME PAPER CHASE 7 (Whitson Publ'g Co., spec. anniversary ed.2003) (1971) [hereinafter ThE PAPER CHASE BOOK) (internal quotation marks omitted). The

question is asked by fictional Harvard law professor Charles W. Kingsfield to student James

Hart on the first day of contracts class. Id. The case under discussion was Hawkins v. McGee. Id.

(discussing Hawkins v. McGee, 146 A. 641 (N.H. 1929)).

3 See Melvin A. Eisenberg, The Theory of Contracts, in ThIE THEORY OF CONTRACT LAW: NEW

ESSAYS 206, 2 11 (Peter Benson ed., 2001) ("A doctrine, even if normatively justified, may serve

as a prima facie premise in legal reasoning, but cannot serve as a conclusive premise of legal

reasoning, because all doctrines are always subject to as-yet-unarticulated exceptions based

on social propositions. Such an exception may be made because the social propositions that

support the doctrine do not extend to a new fact-pattern that is within the doctrine's stated

scope. Alternatively, such an exception may be made because a new fact-pattern that is within

the doctrine's stated scope brings into play other social propositions that require the formula-

tion of a special rule for the fact-pattern.").

4 Hawkins, 146 A. 641.

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KENTUCKY LAW JOURNAL

Accordingly, a modification of or exception to the general rule of contractdamages should be considered, and this Article maintains that such amodification or exception should in fact be established.

In Hawkins, Dr. Edward McGee allegedly promised George Hawkinsthat he would fix his burned hand and given him a one hundred percentperfect or good hand,' but the operation left him with a hairy hand.6 TheNew Hampshire Supreme Court, in an opinion by Justice Oliver WinslowBranch, held that any promise by McGee to Hawkins had to be interpretedobjectively and not based on what McGee might have intended.' Thecourt further held that even when the breach of a contract is based onthe promised outcome of a medical operation, the general rule of contractdamages-protecting the so-called expectation interest-applies, just likeany other breach of contract case.' The effect of these two holdings wasthat Hawkins was entitled to damages that would put him in the positionhe would have been in had McGee kept his alleged promise, with thatpromise being interpreted objectively.

Justice Branch's opinion (applying the expectation damages rule andthe objective theory of contracts) was hardly surprising. It was written in1929 during the era of so-called classical contract law (which believedcertain legal doctrines were "axiomatic," including that contracts shouldbe "interpreted objectively" and that the remedy for any breach ofcontract should be "expectation damages"),9 by a judge trained at Harvard

5 Id. at 643.6 McGee v. U.S. Fid. & Guar. Co., 53 F.2d 953,954 (st Cit. 1931).

7 See Hawkins, 146 A. at 644 ("If the defendant said that he would guarantee a perfectresult and the plaintiff relied upon that promise, any mental reservations which he may havehad are immaterial. The standard by which his conduct is to be judged is not internal butexternal." (citations omitted)).

8 See id. ("The rule thus applied is well settled in this state. 'As a general rule, the mea-sure of the vendee's damages is the difference between the value of the goods as they wouldhave been if the warranty as to quality had been true, and the actual value at the time of thesale, including gains prevented and losses sustained, and such other damages as could bereasonably anticipated by the parties as likely to be caused by the vendor's failure to keep hisagreement, and could not by reasonable care on the part of the vendee have been avoided.'We, therefore, conclude that the true measure of the plaintiffs damage in the present caseis the difference between the value to him of a perfect hand or a good hand, such as thejury found the defendant promised him, and the value of his hand in its present condition,including any incidental consequences fairly within the contemplation of the parties whenthey made their contract.") (citations omitted) (quoting Union Bank v. Blanchard, 18 A. 90,91 (N.H. 1889)). The trial judge had directed the jury to award tort-like damages based on

the damage to the hand and Hawkins's pain and suffering. Id. at 643; see also Christopher W.Frost, Teaching Important Contracts Concepts: Reconsidering the Reliance Interest, 44 ST. Louis U.L.J. 1361, 1363 (zooo) ("The trial court's charge to the jury called for a tort-like measure ofrecovery, permitting the jury to award damages for Hawkins' pain and suffering and for thedamage to the hand." (citation omitted)). The trial court's measure of damages is similar toprotecting the promisee's so-called reliance interest, discussed infra Part I.A.

9 Eisenberg, supra note 3, at 2o8.

328 [Vol. 99

CONTRACTUAL MISUNDERSTANDINGS

Law Schoolo (where the leading classical contract law scholar-SamuelWilliston-taught)."

But as the notion that legal doctrines are axiomatic has been effectivelydiscredited," the question arises whether the law applied in Hawkins wascorrect, at least with respect to its particular facts. My review of the trialtranscript in Hawkins has uncovered that the facts were likely different fromthose commonly portrayed, and the case likely involved a misunderstandingbetween McGee and Hawkins with respect to what McGee was promising.This raises the question whether the general rule of basing expectationdamages on an objective interpretation of the breached promise should bemodified in such a situation.

This Article takes the position that such an exception should be created.Part I of this Article discusses expectation damages, which is the standardremedy for a breach of contract; and the "objective theory of contracts,"under which contract terms are interpreted objectively and not based onthe parties' subjective intentions. Part 1I demonstrates that in a situationin which the parties attach materially different meanings to the terms of acontract, the appropriate measure of damages for breach should be eitheran amount designed to put the injured party in the position he or she wouldhave been in had the promise been kept, based on the breaching party'sintended meaning of the promise, or an amount to protect the injuredparty's reliance interest (whichever is greater). Part III demonstrates thatcontrary to popular perception, Hawkins likely involved a misunderstandingbetween Hawkins and McGee regarding what had been promised, and theappropriate remedy, therefore, should have been based on what McGeethought he had promised (or Hawkins's reliance interest).

I. Two AxioMs oF CLASSICAL CONTRACT LAW-EPECTATION DAMAGES AND

THE OBJECTIVE THEORY OF CONTRACT INTERPRETATION

A. Expectation Damages

When a party breaches an enforceable contract, the injured party hasa right to damages.13 There are three interests of the injured party thatcontract law can seek to protect by such an award: (1) the injured party's

to For a brief biographical sketch of Oliver Winslow Branch, see Russell Bastedo,Publications-Descriptions of Portraits of Justices and Others at the New Hampshire Supreme CourtBuilding Concord, New Hampshire, NH.GOV (1998) (citation omitted), http://www.nh.gov/nhdhr/publications/justices/branch.htmi.

ii See 3 E. ALLAN FARNSWORTH, FARNSWORTH ON CONTRACTS 390 app. (3d ed. 2004) (pro-viding brief biographical sketch of Williston and noting that he taught at Harvard Law Schoolfrom 1890 to 1938).

12 See Melvin A. Eisenberg, The Revocation of Offers, 2oo4 Wis. L. REV. 271, 281.

13 RESTATEMENT (SECOND) OF CONTRACTS § 346(t) (1981).

201O-20II1 329


''expectation interest," which is his or her interest in being put in theposition he or she would have been in had the promise been kept;14 (2)the injured party's "reliance interest," which is his or her interest in beingput in the position he or she would have been in had the promise not beenmade;" and (3) the injured party's "restitution interest," which is his orher interest in having restored any benefit conferred on the other partyas a result of the promise." The traditional remedy for the breach of a"bargained-for exchange contract"" is an award of damages's designed

14 Id. § 344(a); see, e.g., Hawkins v. McGee, 146 A. 641, 644 (N.H. 1929) (holding thatwhen the defendant doctor breached his promise to provide the plaintiff patient with a per-fect hand, the proper measure of damages was an amount representing the difference in valuebetween the hand plaintiff was left with after the operation and the promised hand).

15 RESTATEMENT (SECOND) OF CONTRACTS § 344(b) (1981); see, e.g., Chi. Coliseum Club v.Dempsey, 265 Ill. App. 542, 552-54 (Ill. App. Ct. 1932) (holding that plaintiff was entitled torecover for out-of-pocket expenses incurred prior to the defendant's breach and in relianceon the contract).

16 RESTATEMENT (SECOND) OF CONTRACTS § 344(c) (1981); see, e.g., United States ex rel.Coastal Steel Erectors, Inc. v. Algernon Blair, Inc., 479 E2d 638, 641 (4th Cir 1973) (holdingthat plaintiff was entitled to recover the reasonable value of the work it provided to the de-fendant under the contract). This division of interests (expectation, reliance, and restitution)was suggested by George Gardner, see George K. Gardner, An Inquiry into the Princiles of theLaw of Contracts, 46 HARv. L. REV. I, 15-19 (1932), and made famous by Lon Fuller, see L. L.Fuller & William R. Perdue, Jr., The Reliance Interest in Contract Damages (pt. I), 46 YALE L.J.52, 53-54 (1936). Although Fuller's article was co-authored by William Perdue, Jr., Fuller'sresearch assistant, I assume that Fuller was the author and originator of its theoretical portions.See Peter Benson, Introduction to THE THEORY OF CONTRACT LAw: NEw ESSAYS, supra note 3, atI n.I (noting that Fuller is considered "to be the writer of the article and certainly of its theo-retical parts"). Professor Richard Craswell has argued that Fuller's distinction between thethree interests "is not very helpful in understanding contract remedies," but he acknowledgesthat Fuller's "article still dominates so much of the modern analysis of remedies for breach,"and "most analyses of monetary remedies still begin with Fuller and Perdue's distinctionbetween the expectation, reliance, and restitution interests." Richard Craswell, Against Fullerand Purdue, 67 U. CI. L. REV. 99, 99-100 (2ooo) (citation omitted).

17 A "contract" is defined by the American Law Institute (ALl) as "a promise or a setof promises for the breach of which the law gives a remedy, or the performance of which thelaw in some way recognizes as a duty." RESTATEMENT (SECOND) OF CONTRACTS § 1 (1981).Accordingly, at least based on the ALI's definition, a "contract" is any enforceable promise,not just a promise that is enforceable because it is supported by consideration. Thus, a prom-ise that is enforceable because of the promisee's reliance (traditionally called "promissoryestoppel") or because it was given in recognition of a benefit previously received would be a"contract" under the ALI definition. See id. § 90 (providing that a promise is binding if "thepromisor should reasonably expect [it] to induce action or forbearance on the part of the prom-isee or a third person and which does induce such action or forbearance . . . if injustice can beavoided only by enforcement of the promise"); id. § 86 (providing that a promise is bindingto the "extent necessary to prevent injustice" if "made in recognition of a benefit previouslyreceived by the promisor from the promisee."). Accordingly, I have used the term "bargained-for exchange contract" to differentiate a contract that is binding because it is supported byconsideration from contracts that are binding for other reasons.

18 Specific performance will only be ordered if an award of damages would not be "ade-quate to protect the expectation interest of the injured party." Id. § 359. But see Alan Schwartz,

[Vol. 99330


to protect the injured party's expectation interest." In other words, theaward is designed to give the injured party the "benefit of the bargain."2 oRecovery for the failure to keep an enforceable promise "was from thebeginning measured by the value of the promised performance"" and theconnection between contract law and expectation damages was "taken ascanonical for some hundred years."22

The Case for Specific Performance, 89 YALE L.J. 27I (1979) (arguing that specific performanceshould be routinely available as a remedy for breach of contract).

19 See RESTATEMENT OF CONTRACTS § 329 (1932) ("Where a right of action for breach ex-ists, compensatory damages will be given for the net amount of the losses caused and gainsprevented by the defendant's breach, in excess of savings made possible . . . ."); id. § 329cmt. a ("In awarding compensatory damages, the effort is made to put the injured party in asgood a position as that in which he would have been put by full performance of the contract.... "); RESTATEMENT (SECOND) OF CONTRACTS § 347 (1981) ("IT]he injured parry has a rightto damages based on his expectation interest . . ."); id. § 347 cmt. a ("Contract damages areordinarily based on the injured party's expectation interest and are intended to give him thebenefit of his bargain by awarding him a sum of money that will, to the extent possible, puthim in as good a position as he would have been in had the contract been performed."); id.

§ 344 cmt. a ("Ordinarily, when a court concludes that there has been a breach of contract, itenforces the broken promise by protecting the expectation that the injured party had when hemade the contract. It does this by attempting to put him in as good a position as he would havebeen in had the contract been performed, that is, had there been no breach. The interest pro-tected in this way is called the'expectation interest."'); RICHARD CRASWELL & ALAN SCHWARTZ,

FOUNDATIONS OF CONTRACT LAW 41 (1994) ("Anglo-American law ordinarily awards expecta-tion damages as the remedy for breach of contract."). But see Robert A. Hillman, ContractLore,

27 J. CORP. L. 505, 512 (2002) ("[E]xpectancy damages virtually never make an injured partywhole, so it would be difficult to maintain that the general rule is that they do except whenan exception applies.").

2o RESTATEMENT (SECOND) OF CONTRACTs § 344 cmt. a (i98i) (internal quotation marksomitted) (noting that awarding expectation damages "is sometimes said to give the injuredparty the 'benefit of the bargain"').

2 1 Fuller & Perdue, supra note 16, at 60.

22 CHARLES FRIED, CONTRACT As PROMISE: A THEORY OF CONTRACTUAL OBLIGATIONS 18

(1981); see also Fuller & Perdue, supra note 16, at 67 ("[The measure of recovery was, as weknow, from the very beginning the promised price, the expectancy."). A.W.B. Simpson hasasserted that even under English common law in the fifteenth and sixteenth centuries, "theprinciple of compensation as opposed to restitution or recuperation was always grasped," and"the courts consistently treated the breach of promise as the deceitful wrong, with the resultthat the proper measure of damage was a substitute for performance," though juries weregiven the discretion to award less "if they thought fit." A.W.B. SIMPsoN, A HISTORY OF THE

COMMON LAW OF CONTRACT: THE RISE OF THE ACTION OF AssuMPSIT 583, 587 (1975) (citationomitted). But see PS. ATIYAH, 'E RISE AND FALL OF FREEDOM OF CONTRACT 142 (1979) ("[A]respect in which the eighteenth-century model of contract differed from that of the presentday concerned the nature of the remedy which a plaintiff was given for a breach of contract....The notion that a promisee was entitled to have his expectations protected, purely and simplyas such, as a result of a promise and nothing else, was not generally accepted in eighteenth-century law."); see also id. at 148-49 ("In 1770 the jury still retained a considerable measureof discretion over the application of legal rules, and judges were not unwilling to connive at,or even encourage, the doing of substantial justice by juries in many civil (as well as criminal)cases. In contract matters, this meant, among other things, that the damages were almost en-

201O-201I11 331


The significance of an award of damages designed to protect the injuredparty's expectation interest is that he or she will generally receive a largerrecovery than if provided with an award protecting the reliance or restitutioninterests.3 Also, protecting the expectation interest means that a breach ofcontract action can be maintained in the absence of reliance by the injuredparty or the unjust enrichment of the other party.2 4 Thus, the expectationinterest rule is arguably contract law's "most basic" principle."

Although the reliance interest and the restitution interest are sometimesprotected when a bargained-for exchange contract is breached, the relianceinterest is usually used only when the injured party cannot prove his or herlost profits with the required certainty.26 Furthermore, it has been arguedthat the use of the reliance interest when lost profits cannot be proven withreasonable certainty is in fact the protection of the expectation interestwith an assumption that the injured party would have at least brokeneven had the contract been performed." And efforts by an injured party

tirely at the jury's discretion.").

23 See RESTATEMENT (SECOND) OF CONTRACTS § 344 cmt. a (1981).

Although [the reliance interest] may be equal to the expectationinterest, it is ordinarily smaller because it does not include the injuredparty's lost profit.

... Although [the restitution interest] may be equal to the expectationor reliance interest, it is ordinarily smaller because it includes neitherthe injured party's lost profit nor that part of his expenditures in reliancethat resulted in no benefit to the other party.

Id. Craswell, supra note 16, at 102 ("[Tlhe expectation measure restores to the nonbreachernot only everything he gave up in reliance on the contract, but also any net profits he wouldhave made if the contract had been performed. Thus, the expectation measure should usuallyexceed the reliance measure (and also the restitution measure), at least in the typical case inwhich the nonbreacher's profits would have been positive." (citation omitted)).

24 SeeW. David Slawson, Why Expectation Damages for Breach of ContractMust Be the Norm:A Refutation of the Fuller and Perdue "Three Interests" Thesis, 8 1 NEB. L. REV. 839,846(2003) (ar-

guing in favor of expectation damages because it provides a remedy for all breaches, includingbreaches when there has been no reliance).

25 Benson, supra note 16, at 2; see also id. at 3 ("[I]t is precisely the availability of theexpectation remedy for breach of a wholly executory contract that is the distinctive hallmarkof contract law.").

26 See RESTATEMENT (SECOND) OF CONTRACTS § 349 cmt. a (1981) (noting that the relianceinterest can be used as the measure of damages "if [the plaintiff] cannot prove his profit withreasonable certainty"); Slawson, supra note 24, at 856 ("Injured parties who cannot prove theirlost profits often use the reliance measure to recover their costs." (citation omitted)).

27 David W. Barnes, The Net Expectation Interest in Contract Damages, 48 EMORY L.J. 1137,

1153 (1999). This theory encounters difficulties with cases that refuse to treat pre-contractexpenditures as part of the reliance interest. See Chi. Coliseum Club v. Dempsey, 265 Ill. App.

542 (Ill. App. Ct. 1932) (holding that expenses incurred prior to entering into the contract

332 [Vol. 99


to recover based on its reliance interest in the case of a losing contract aresubject to deduction for "any loss that the party in breach can prove withreasonable certainty the injured party would have suffered had the contractbeen performed."" If the defendant carries this burden, the injured party'srecovery would be the same as a recovery that protects the expectationinterest.29

The restitution interest is usually used only when the contract (from theinjured party's standpoint) turns out to be a losing contract.30 Furthermore,when the restitution interest is used as the measure of damages in sucha situation, the injured party does not seek to enforce the contract, butinstead sues in quasi-contract.31 Thus, the entire purpose of the remedywhen the injured party seeks to enforce a bargained-for exchange contractis to protect the party's expectation interest."

Until the 1930s, an award of damages based on the expectation interest(commonly referred to as "expectation damages" or "expectancy damages")was simply accepted as the appropriate remedy for the breach of a contract,and the rationale for protecting the expectation interest went unquestioned.3 3

One of the axioms of classical contract law, which dominated from the mid-nineteenth century to the early twentieth century,3 4 was "that the measureof damages for breach of contract is expectation damages," and "no room[was] allowed for justifying doctrinal propositions on the basis of moral andpolicy propositions." 3s

could not be recovered as reliance damages); FARNSWORTH,supra note 11, § 12.I6 (stating thatan award of damages designed to protect the non-breaching party's reliance interest "will[not] allow a party to recover costs incurred before the contract was made" (citation omitted)).But see Sec. Stove & Mfg. Co. v. Am. Ry. Express Co., 51 S.W.2d 572, 577 (Mo. Ct. App. 1932)

(permitting the recovery of pre-contract expenditures); Anglia Television Ltd. v. Reed, 119721I Q.B. 6o (Ct. App.) at 64 (Eng.) (also permitting the recovery of pre-contract expenditures).

28 RESTATEMENT (SECOND) OF CONTRACTS § 349 (1981); see Gregory S. Crespi, RecoveringPre-Contractual Expenditures as an Element of Reliance Damages, 49 SMU L. REV. 43, Parts III(C),V(B) (1995).

29 RESTATEMENT (SECOND) OF CONTRACTS § 349 cmt. a (1981).

30 See Slawson, supra note 24, at 853 ("[T]here is one situation in which the restitutionmeasure provides a larger recovery than the expectation (or reliance) measure would. Thisis the case in which a material breach by one party entitles the other to cease performing acontract on which he is losing money - the 'losing contract' case.").

31 See RESTATEMENT (SECOND) OF CONTRACTS ch. 16, topic 4, intro. note (1981) (notingthat when the non-breaching party seeks a recovery based on his or her restitution interest,the party "has chosen it as an alternative to the enforcement of the contract between them"(citation omitted)).

32 See RESTATEMENT (SECOND) OF CONTRACTS § 344 (i98i); see also id. cmt. a.

33 Benson, supra note 16, at 2.

34 Melvin Aron Eisenberg, The Emergence of Dynamic Contract Law, 2 THEORETICAL

INQUIRIES L. 1, 7 (zoo).

35 Eisenberg, supra note 3, at zo8; see also Craswell, supra note 16, at 132 ("[Eixpectationdamages were the standard remedy of classical contract doctrine . . . ."). The un-theoretical

20IO-20II11 333


Prior to this time, contracts scholars endeavored "to bring order andinternal consistency to the law ofcontract," and " [t]hey simply presuppose[d]the premise that the expectation remedy is a form of compensation withoutexploring its normative basis and they stipulate[d] the existence of a deepconnection between the expectation principle and the basic doctrines ofcontract formation without explaining its necessity.1" 6 Samuel Williston, inhis classic 1920 contracts treatise, simply stated that "[i]n fixing the amountof [contract] damages, the general purpose of the law is, and should be,to give compensation: that is, to put the plaintiff in as good a positionas he would have been in had the defendant kept his contract."" TheRestatement of Contracts, published in 1932, adopted expectation damagesas the standard remedy (without using the term "expectation damages"),but provided no support for the rule." The apparent lack of interest inthe expectation damages rule (and its theoretical underpinnings) isdemonstrated by the failure to discuss the issue of expectation damages inChristopher Columbus Langdell's A Selection of Cases on the Law of Contracts

nature of the work of classical contracts scholars should not, however, detract from their monu-mental effort to bring order to the law of contracts. See Benson, supra note 16, at 2 ("Williston'sA Treatise on the Law of Contracts represents the most systematically and carefully worked-out presentation of the legal point of view that culminates several decades of intensive andhighly sophisticated efforts by such masters of the common law as Pollock, Holmes, Langdell,Ames, Holdsworth, Salmond, and Leake, to bring order and internal consistency to the law ofcontract. These writers, and Williston in particular, were remarkably successful in achievingthis aim." (citation omitted)); see also id. at 2 n.4 ("[T]heir work still represents to date themost sophisticated and successful effort to present the legal point of view in one integratedcompass."). The culmination of their efforts was the Restatement of Contracts. RESTATEMENT

(SECOND) OF CONTRACTS, at VII (I981) (noting that "the work was a legendary success, ex-ercising enormous influence as an authoritative exposition of the subject"); see also GRANTGILMORE, THE DEATH OF CONTRACT 59 (1974) ("[Tjhe Restatement of Contracts is not only thebest of the Restatements, it is one of the great legal accomplishments of all time.").

36 Benson, supra note 16, at 2.

37 3 SAMUEL WILLISTON, THE LAW OF CONTRACTS § 1338 (1920). The current version of

Williston on Contracts is not any more illuminating on the theory underlying the protection ofthe expectation interest. See 24 SAMUEL WILLIsToN & RICHARD A. LORD, A 'IEATISE ON THE

LAw OF CONTRACTS § 64:2, at 23-24 (4th ed. 2002) ("The theory underlying [the expectation

damages rule] is as simple as it is significant: A promisee enters into a particular contract be-cause he or she wants a particular outcome and believes that the best possible outcome, underthe circumstances, will be achieved by contracting with this particular promisor. When thepromisor fails to perform as promised, the promisee becomes entitled to damages designedto compensate him or her for the harm caused by the breach. That harm, in turn, is the losssuffered by the promisee when the promisor failed to perform his or her promise-in otherwords, the value to the promisee of the promise that was broken." (citation omitted)).

38 See RESTATEMENT OF CONTRACTS § 329 (1932) ("Where a right of action for breach ex-

ists, compensatory damages will be given for the net amount of the losses caused and gainsprevented by the defendant's breach, in excess of savings made possible .... "); id. cmt. a ("Inawarding compensatory damages, the effort is made to put the injured party in as good a posi-tion as that in which he would have been put by full performance of the contract....").

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(1871),39 his A Summary of the Law of Contracts (1880)," or Oliver WendellHolmes, Jr.'s The Common Law (1881).41

But in 1936, Lon Fuller, in his famous Yale Law Journal article titledThe Reliance Interest in Contract Damages, questioned why the protection ofthe expectation interest should be the standard remedy for the breach of acontract. 42 Because the remedy provided for the breach of a legal duty oftensheds light on the purpose for the law creating the duty, Fuller's questionraised the even more fundamental issue of why the law enforces contractS43

(though Fuller acknowledged that there might be a "divergence of measure[of damages] and motive" for enforcing a particular promise, particularlyif the adopted measure was "a simpler and more easily administeredmeasure").'

Fuller argued that damages based on protecting the expectationinterest is a "queer kind of 'compensation"' because it gives the injuredparty something he or she never had,45 and it therefore must be a form ofdistributive justice with a lesser claim to protection than the reliance andrestitution interests.' Fuller rejected the so-called will theory of contractlaw (which was based on the notion that contracts were enforceable

39 C. C. LANGDELL, A SELECTION OF CASES ON THE LAW OF CONTRACTS (Legal ClassicsLibrary 1983) (1871).

40 C. C. LANGDELL, A SUMMARY OF THE LAW OF CONTRACTS (TGC Publishers 2004) (1 880)[hereinafter LANGDELL, SUMMARY].

41 OLIVER WENDELL HOLMES, JR., THE COMMON LAw (Mark DeWolfe Howe ed., The

Belknap Press of Harvard Univ. Press 1963) (1881).

42 Fuller & Perdue, supra note 16, at 53. Fuller's article has been described as a "tower-ing classic." Craswell, supra note 16, at 99 ("In the history of contract law, and of Americanlegal thought in general, this article stands as a towering classic."); see also Frost, supra note 8,at 1361 ("Perhaps no single article in any legal discipline has had the pervasive impact on theway the law is taught.").

43 See Fuller & Perdue, supra note 16, at 53 ("[Ilt is impossible to separate the law ofcontract damages from the larger body of motives and policies which constitutes the general

law of contracts.").

44 Id. at 68 (citation omitted).

45 Id. at 53.46 Id. at 56. "Distributive justice" has been defined as

the principles that guide the distribution of goods or burdens among agroup of recipients. This is in contrast to claims of justice arising fromthe correction of dealings between two parties ('corrective justice'), justpunishment of wrong actions ('retribution'), and the proper following ofrules laid down earlier ('formal' or 'legal' justice).

BRIAN H. Bix,A DICTIONARY OF LEGALTHEORY 55 (2004); see also ARISTOTLE, THE NICOMACHEAN

ETHICS I 18 (J. A. K. Thomson trans., Penguin Books 2004) (1953) ("One kind of particular jus-tice ... is that which is shown in the distribution of honour or money or such other assets as aredivisible among the members of the community (for in these cases it is possible for one personto have either an equal or an unequal share with another); and another kind which rectifies theconditions of a transaction.").

2010- 2011] 335


because the parties had voluntarily assumed the responsibility to performas promised)47 as providing the basis for the expectation damages rule:

[The "will theory" of contract law] cannot be regarded as dictating in allcases a recovery of the expectancy. If a contract represents a kind of privatelaw, it is a law which usually says nothing at all about what shall be donewhen it is violated. A contract is in this respect like an imperfect statutewhich provides no penalties, and which leaves it to the courts to find away to effectuate its purposes. There would, therefore, be no necessarycontradiction between the will theory and a rule which limited damages tothe reliance interest."

Rather, Fuller speculated that the expectation interest was protectedfor several other reasons. First, to compensate for reliance losses, whichFuller maintained were often "very difficult to prove," if one consideredforegone opportunities for gain (i.e., foregone opportunities to enter intoother contracts) a reliance loss.49 Fuller maintained that most contracts resultin the parties foregoing the opportunity to enter into similarly beneficialcontracts, and thus, when a party breaches, the injured party's reliance lossusually equals the loss in value of the promised performance (because theinjured party forewent the opportunity to secure similar performance froma third party)." Fuller concluded that:

This foregoing of other opportunities is involved to some extent in enteringmost contracts, and the impossibility of subjecting this type of reliance toany kind of measurement may justify a categorical rule granting the value of

47 See James W. Fox Jr., The Law of Many Faces: Antebellum Contract Law Background ofReconstruction-Era Freedom of Contract, 49 AM. J. LEGAL HisT. 61, 62 (2007) ("According tothis classical, will theory view, 'contract law' describes the legal rules by which courts wouldenforce private agreements as stated by the parties; such agreements were seen as expressingthe will of each party, and by enforcing the agreements courts would foster individual freedomand autonomy.").

48 Fuller & Perdue, supra note 16, at 58.

49 Id. at 6o; see also Craswell, supra note 16, at 103 ("In [Fuller and Perdue's] view, thestrongest argument for awarding expectation damages justifies that remedy as an indirect wayof protecting the reliance interest, when the nonbreacher's reliance losses would be difficultto prove directly." (citation omitted)); Hillman, supra note 19, at 508 ("[Clontract law's actualremedial goal may be to protect an injured party from reliance losses, which are often moredifficult to prove than expectancy damages."). Out-of-pocket expenditures, as opposed tolosses based on foregone opportunities, are likely to be easier to prove than expectation dam-ages. See RESTATEMENT (SECOND) OF CONTRACTS § 352 cmt. a (198t) ("[Tihere is usually littledifficulty in proving the amount that the injured party has actually spent in reliance on thecontract, even if it is impossible to prove the amount of profit that he would have made.").Courts generally have not permitted a recovery for lost opportunities as part of the relianceinterest. FARNswoRTH, supra note II, § 12. 1.

50 Fuller & Perdue, supra note 16, at 6o; see also RiCHARD A. POSNER, ECONOMic ANALYSIS

OF LAW 122 (6th ed. 2oo3) ("If the victim 'relied' by forgoing an equally profitable contract,the two measures merge.").

336 [Vol. 99


the expectancy as the most effective way of compensating for such losses."

Fuller noted that this explanation for protecting the expectation interest"would be most forceful in a hypothetical society in which all valueswere available on the market and where all markets were 'perfect' in theeconomic sense."5 If such conditions existed, the expectation interest andthe reliance interest would be identical because "[tihe plaintiff's loss inforegoing to enter another contract would be identical with the expectationvalue of the contract he did make."" Fuller recognized, however, that thisargument "loses force to the extent that actual conditions depart from [aneconomy where all values are available on the market]."'

Second, Fuller argued that the purpose of awarding expectation damagesinstead of reliance damages might be to deter breaches of contract, whichis beneficial because breaches of contract cause reliance losses.ss Fullerasserted that "[w]hatever tends to discourage breach of contract tends toprevent the losses occasioned through reliance," and an award ofexpectationdamages, being "a more easily administered measure of recovery than thereliance interest ... will in practice offer a more effective sanction againstcontract breach."56

Third, Fuller contended that in contrast to the negative point of view ofcuring and preventing reliance losses, a rationale supporting the protectionof the expectation interest was promoting value-enhancing exchangesand stimulating economic activity." Protecting the expectation interestaccomplishes this because contractual arrangements are more productive

5 1 Fuller & Perdue, supra note 16, at 6o; see also POSNER, supra note 50, at 122

("[Rieliance costs incurred during the executory period are difficult to compute. Havingsigned a contract, a party will immediately begin to make plans both for performing the con-tract and for making whatever adjustments in the rest of his business are necessary to accom-modate the new obligation. The costs of this planning, and the costs resulting from the changeof plans when he finds out that the contract will not be performed, will be hard to estimate.").If this is true, it would perhaps be an exception to the general rule that "[contract] [diamages,

[including reliance damages], are not recoverable for loss beyond an amount that the evidencepermits to be established with reasonable certainty." RESTATEMENT (SECOND) OF CONTRACTS

§ 352 (1981); see also id. cmt. a ("[T]he requirement applies to damages based on the relianceas well as the expectation interest . . . ."). It could, however, be argued that the expectationinterest is sufficient evidence of the foregone opportunities such that the certainty require-ment would not preclude recovery. Fuller's idea that courts use one of the three interests tocure losses based on another interest has seemingly been applied when courts award damagesbased on the defendant's gain from breach as a proxy for the expectation interest. See, e.g.,Laurin v. DeCarolis Constr. Co., 363 N.E.2d 675, 693 (Mass. 1977) (Braucher, J.) (awardingamount equal to defendant's profit from breach).

52 Fuller & Perdue,supra note 16, at 62.

53 Id.

54 Id.

55 Id. at 61.

56 Id. (citation omitted).

57 Id

20IO-20II11 337


when the parties are able to rely on them and take resulting action." Aparty who knows that it will be able to recover damages for breach based onthe larger expectation recovery, as opposed to the usually smaller reliancerecovery, will be more likely to rely on the contract." As Fuller stated, "[t]oencourage reliance we must therefore dispense with its proof." Therefore,Fuller believed that protecting the expectation interest might have theeffect of "promoting and facilitating reliance on business agreements."'6

Thus, according to Fuller, expectation damages likely were awarded not toprotect the expectation interest, but to protect the reliance interest.62

Theorizing about the proper measure of damages arose again in thelate 1970s and early 1980s. 6

1 During this time, Patrick Atiyah argued thatprotecting the expectation interest could not rank equally with protectingthe restitution or reliance interests,' and Robert Hillman noted thatprotecting the expectation interest was somewhat inconsistent with theobjective theory of contract formation and interpretation because the latteris premised on protecting and encouraging reliance.65 But most scholarsdefended the award of expectation damages. Following Fuller's lead,"[miost analysts explainled] the expectancy approach as the best method ofcreating incentives for parties to contract and to rely on their contracts."6

The two leading approaches to contract theory-one emphasizingthe "moral value of autonomy" (a deontological approach derived fromKantianism and liberalism)67 and the other emphasizing economicanalysis (a consequentialist approach that is in some sense a variation ofutilitarianism)68-also defended the expectation interest as the proper

5 8 Id.

59 Id.6o Id. at 62.61 Id. at 61. It has been argued, however, that expectation damages can result in inef-

ficient over-reliance by the promisee. A. MITCHELL POLINSKY, AN INTRODUCTION TO LAW AND

EcoNoMics 39 (3d ed. 2003).62 See Slawson, supra note 24, at 841 ("[Fuller and Perdue] eventually concluded that

although there were no good reasons for protecting the expectation interest, there was a goodreason for using the expectation measure of damages as the norm....") (emphasis added) (cita-tions omitted).

63 Benson, supra note 16, at 4.64 ATIYAH, supra note 22, at 4.65 Hillman, supra note 19, at 511-12.

66 Id. at 5o6.

67 Eisenberg, supra note 3, at 223; see also Bix, supra note 46, at 51 ("Deontological theo-ries of morality or ethics focus exclusively, or primarily, on the intrinsic moral status of actions,as contrasted with theories (such as utilitarianism) that focus on consequences. Deontologicaltheories often derive from, or are otherwise connected to, the work of Immanuel Kant (1724-1804)."). "[L]iberalism" is "the belief that it is the aim of politics to preserve individual rightsand to maximize freedom of choice." ThE CONCISE OXFORD DICTIONARY OF POLITICS 3o6 (lainMcClean & Alistair McMillan eds., 3d ed. 2009). "Kantianism" is discussed infra note 68.

68 See Bix, supra note 46, at 42 ("Contemporary discussions about the philosophi-

338 [Vol. 99

2010-20111 CONTRACTUAL MISUNDERSTANDINGS 339

measure of damages. Charles Fried was the principal defender of a contracttheory based on a deontological approach, and he saw the foundations ofcontract law as the moral obligation to keep a promise and Kantian-basednotions of individual autonomy.' Fried felt that protecting the expectationinterest was consistent with those bases, stating:

If I make a promise to you, I should do as I promise; and if I fail to keep mypromise, it is fair that I should be made to hand over the equivalent of thepromised performance. In contract doctrine this proposition appears as theexpectation measure of damages for breach."o

Law and economics scholars argued that the expectation interestdiscourages inefficient breaches." "Setting damages any lower thanexpectancy would create an incentive for the promisor to breach evenwhere the surplus from breaching would be insufficient to make the injuredpromisee whole."n

Although expectation damages are the norm, and defended by the

cal foundations of contract law usually divide ... according to whether the analysis shouldbe approached from traditional moral philosophy or from economic analysis."); id. at 214

("Economic analysis-and its legal analogue, law and economics-can be seen to be ground-ed on a variation of utilitarianism...."). These two leading theories of contract law thus alignroughly with two of the leading theories of moral philosophy-utilitarianism and Kantianism."Utilitarianism is, very generally, the view that the rational choice in morality is always thechoice that will maximize human happiness or well-being." JEFFRIE G. MURPHY & JULES L.COLEMAN, PHILOSOPHY OF LAW: AN INTRODUCTION TO JURISPRUDENCE 71 (rev. ed. 1990). On theother hand, "Kantianism, again very generally, is the view that the rational choice in ethics isalways the choice that respects the rights of autonomous persons freely to determine theirown destinies, even if this respect is bought at the cost of a loss of happiness or well-being."Id.

69 FRIED, supra note 22, at 6; see also Eisenberg, supra note 3, at 224 ("Fried's book isthe leading exemplar of an autonomy theory of contracts. ). The other leading autonomytheory was proposed by Randy Barnett. See generally Randy E. Barnett, A Consent Theory ofContract, 86 COLUM. L. REV. 269 (1986).

70 FRIED, supra note 22, at l7; see also Eisenberg, supra note 3, at 225 ("One of Fried'scentral claims is that the autonomy theory of contract explains the remedy of expectationdamages, which Fried sees as a crucial element that distinguishes contract law from otherbranches of law, such as torts. Under autonomy theory, he says, promises should be enforced'as such'-that is, simply because the promise was made, not because enforcement of promis-es will enhance social welfare."). Fried's book has been referred to as "[a]rguably the most im-portant, and certainly the most discussed single work of this first wave of contract theorizing."Benson, supra note 16, at 5 (citation omitted). The weakness in Professor Fried's argument is,of course, the objective theory of contract formation and interpretation. Professor Hillman hasstated that "professors have written books and articles revealing that the 'key' to contract lawis promise or consent or something else that requires lots of explaining away of the objectivetheory of contract formation and interpretation." Hillman, supra note 19, at 513 n-59.

71 POSNER, supra note 5o, at 12 1.

72 Hillman, supra note 19, at 507 (citation omitted); see also POLINSKY, supra note 61, at

33-36 (discussing efficient-breach theory). Professor Polinsky has argued, however, that ex-pectation damages can result in inefficient over-reliance by the promisee. Id. at 39.


leading theories of contract law, it is important to recognize that suchdamages "virtually never put the injured party in as good a position as if thecontract were performed."" This is because the law generally precludesthe recovery of certain losses, such as those that the non-breachingparty "could have avoided without undue risk, burden or humiliation;"'damages that the breaching party "did not have reason to foresee as aprobable result of the breach when the contract was made;"" damages thatcannot be proven with "reasonable certainty;"" "emotional disturbance"damages;n and attorney's fees incurred enforcing the contract." In fact, theAmerican Law Institute (ALI) takes the position that a court may limitdamages "if it concludes that in the circumstances justice so requires inorder to avoid disproportionate compensation."" Also, even though blackletter law states that expectation damages are to be determined based onthe injured party's subjective valuation of the lost performance,so "courtstypically compute damages objectively, thereby ignoring a party's specialcircumstances .. 8. 1

It is also important to recognize that although an award of expectationdamages is the standard remedy for the breach of a bargained-for exchangecontract, the remedy for the breach of a promise that is enforceable solelybecause of the promisee's reliance "may be limited as justice requires.""Thus, "relief may sometimes be limited to restitution or to damages orspecific relief measured by the extent of the promisee's reliance rather thanby the terms of the promise. "83 Also, a promise that is enforceable solelybecause it was made in recognition of a benefit previously received by thepromisor is not binding "to the extent that its value is disproportionate tothe benefit."'

73 Hillman, supra note 19, at 506.

74 RESTATEMENT (SECOND) OF CONTRACTS § 350(I) (1981).

75 Id § 351(0).76 Id. § 352.

77 Id. § 353.78 See Hillman, supra note 19, at 507-08.

79 RESTATEMENT (SECOND) OF CONTRACTS § 351(3) (1981).8o See id. § 347 cmt. b (noting that expectation damages should be measured by the loss

in value to the "injured party" and not "some hypothetical reasonable person").81 Hillman, supra note 19, at 508 (citation omitted). This could be caused by the limita-

tions based on certainty and foreseeability.

82 RESTATEMENT (SECOND) OF CONTRACTS § 90(1) (1981).

83 Id. § 90(t) cmt. d. The ALI notes that "[ijf it is reliance that is the basis for the en-forcement of a promise, a court may enforce the promise but limit the promisee to recoveryof his reliance interest." Id. § 344 cmt. c. It has been argued, however, that "even in the situ-ations for which the contracts restatements have explicitly suggested a flexible approach todamages, the courts continue to use the expectation measure almost exclusively of the othertwo." Slawson, supra note 24, at 842 (citation omitted).

84 RESTATEMENT (SECOND) OF CONTRACTS § 86(2)(b) (1981); see also Mary E. Becker,

34o0 [Vol. 99


The ALI's acceptance that the remedy for the breach of a bindingpromise should in some situations be aligned with the interest that rendersthe promise binding was an important one, and one that had previously ledto a debate between Samuel Williston and Frederick Coudert (a New Yorkattorney) during the drafting of the Restatement."' Williston maintained that ifa promise is enforceable, expectation damages were appropriate regardlessof the basis for enforcing the promise."6 In Williston's view (which appearssimilar to Fried's view of the rationale for expectation damages), to saythat a promise is enforceable is to say that the injured party is entitled tocompensation equal to the lost performance." Coudert, in contrast, believedthe remedy should be aligned with the interest supporting enforcement."The issue went unanswered in the Restatement, but the Restatement (Second)took the flexible approach discussed above.

Accordingly, whatever the purpose of protecting the expectationinterest might be, that purpose is outweighed, in certain circumstances, bycompeting policies." For example, attorney's fees are not awarded to theprevailing party because we do not want to discourage a party from seekingto vindicate his or her rights." Damages must be proven with reasonablecertainty out of a concern courts will award "baseless recoveries.""Unforeseeable damages are not recoverable because of a concern thatpersons will be reluctant to enter into contracts if they could face excessiveliability and also to encourage them to disclose special circumstances to theother party during the negotiation process." Damages can also be limitedin certain situations when "justice requires"93 or when the result wouldlead to "disproportionate" compensation.9 4

Promissory Estoppe/Damages, 16 HOFSTRA L. REV. i3I, 163 (1987) (concluding that expectationdamages are generally available in promissory estoppel cases); Daniel A. Farber & John H.Matheson, Beyond Promissory Estoppel: Contract Law and the "Invisible Handshake," 52 U. CHI.

L. REV. 903, 909-1o (1985) (same); Edward Yorio & Steve Thel, The Promissory Basis of Section

90, 1o YALE L.J. II I, I30-132 (i99i) (same).

85 Proceedings at the Fourth AnnualMeeting April 29 - May i, 1926, 4 A.L.I. PROc. app. at98-100 (1926).

86 See id. at 99.

87 See id.

88 See id.

89 See Hillman, supra note 19, at 508.



92 Id. (citations omitted); see Richard Danzig, Hadley v. Baxendale: A Study in the

Industrialization of the Law, in CONTRACTS STORIES I, 12 (Douglas G. Baird ed., 2007) (discuss-

ing the excessive liability entrepreneurs faced in the nineteenth century).

93 RESTATEMENT (SECOND) OF CONTRACTS H 90(I), 351(3) (1981).

94 Id. H§ 86(2)(b), 351(3).

20IO-20II11 341


B. The Objective Theory of Contract Interpretation

Another basic principle of contract law, and an axiom of classical contractlaw,95 is that the meaning of an enforceable promise, i.e., the scope of thecontractual obligation, is determined objectively." Contract law "adopts anexternal or objective standard for interpreting conduct; it means the externalexpression of intention as distinguished from undisclosed intention.""

95 Eisenberg, supra note 3, at 2o8;see also LANGDELL, SUMMARY, supra note 40, at 244 ("Asto the rule that the wills of the contracting parties must concur, it only means that they mustconcur in legal contemplation .... In truth, mental acts or acts of the will are not the materialsout of which promises are made ... ."); Clare Dalton, An Essay in the Deconstruction of ContractDoctrine, 94 YALE L.J. 997, 102 (1985) (citation omitted) ("The idea that contractual obliga-tion has its source in the individual will persisted into the latter part of the nineteenth century,consistent with the pervasive individualism of that time and the general incorporation intolaw of notions of liberal political theory. Late nineteenth-century theorists like Holmes andWilliston, however, began to make clear that the proper measure of contractual obligation wasthe formal expression of the will, the will objectified. Obligation should attach, they reasoned,not according to the subjective intention of the parties, but according to a reasonable interpre-tation of the parties' language and conduct."). Holmes maintained that

[j]ust as the external standard has come to control criminal liabilityand responsibility in tort, so, despite conventional pretentions to thecontrary, it has come to govern the field of contract. Men are held liablefor breach of their contractual undertakings not because there had beena meeting of the minds of the contracting parties-a true synthesis ofwills-but because words of assurance have been so uttered as to leadthe other party to the bargain reasonably to suppose that the promisormeans business.

Mark DeWolfe Howe, Introduction to HOLMES, supra note 41, at x, xxi; I WILLIsToN,supra note

37, § 21, at 22 (citation omitted) ("In regard to both torts and contracts, the law, not the parties,fixes the requirements of a legal obligation."); 2 id. § 602, at 1160 ("The only inquiry which isgenerally pertinent is the meaning of the language used when judged by the standard adoptedby the law."); RESTATEMENT OF CONTRACTS § 226 cmt. b (1932) ("The meaning that shall begiven to manifestations of intention is not necessarily that which the party from whom themanifestation proceeds, expects or understands.").

96 RESTATEMENT (SECOND) OF CONTRACTS § 2(I) (1981) ("A promise is a manifestation ofintention to act or refrain from acting in a specified way, so made as to justify a promisee inunderstanding that a commitment has been made."); id. § 200 cmt. b ("[Tihe meaning of thewords or other conduct of a party is not necessarily the meaning he expects or understands.");see also Hotchkiss v. Nat'l City Bank of N.Y., 200 F. 287, 293 (S.D.N.Y. 1911) (Hand, J.) ("Acontract has, strictly speaking, nothing to do with the personal, or individual, intent of theparties.... If... it were proved by twenty bishops that either party, when he used the words,intended something else than the usual meaning which the law imposes upon them, he wouldstill be held, unless there were some mutual mistake, or something else of the sort."), aff'dsub nom. Ernst v. Mechs.' & Metals Nat'l Bank of N.Y., 201 F. 664 (2d Cir. 1912), aff'd, Nat'lCity Bank of N.Y. v. Hotchkiss, 231 U.S. 50 (1913); Hillman, supra note 19, at 5iI ("[Ajctualintentions and agreements hardly matter in cases that get to court. Instead, courts apply anobjective theory of formation and interpretation, under which courts enforce contracts basedon apparent, not real intentions." (citations omitted)).

97 RESTATEMENT (SECOND) OF CONTRACTS § 2 cmt. b (1981).

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Thus, when the parties to a contract interpret its terms differently, aninterpretation will be given based on how a reasonable person, acting withinthe context of the agreement, would have interpreted the terms." "[T]heintentions of the parties to a contract . . . are to be ascertained from theirwords and conduct rather than their unexpressed intentions.", As statedby Lawrence Friedman, "[tlhe so-called objective theory of contracts ...insisted that the law enforce only objective manifestations of agreementand rejected the notion that the essence of an enforceable contract wasa subjective 'meeting of the minds' of the parties."10 Therefore, unlessthe parties attach the same unreasonable meaning to a contract term,101

the term will be interpreted objectively.10 In other words, "the questionof meaning in cases of misunderstanding depends on an inquiry into whateach party knew or had reason to know . . . ."'03

Different theories have been advanced for the origin of the objectivetheory of contract formation and interpretation. One theory, advanced byscholars such as Lawrence Friedman and Morton Horwitz, asserts that theobjective theory originated in the late nineteenth or early twentieth centuryto promote the needs of the market economy and laissez-faire economics."Under this theory, the rationale for the objective theory is to "protect[] apromisee's reasonable reliance on the promisor's manifestation of intent."10 5

As stated by Judge Easterbrook, "if intent were wholly subjective . .. noone could know the effect of a commercial transaction until years after thedocuments were inked. That would be a devastating blow to business." 06

98 See id. § zo(i) (stating if the parties attach materially different meanings to the con-tract's key terms, and the different interpretations are equally reasonable, there is no mutualassent and thus no contract); id. § 20I(2); Hillman, supra note 19, at 511; see, e.g., FrigalimentImporting Co. v. B.N.S. Int'l Sales Corp., 190 F. Supp. 116, 121 (S.D.N.Y. 1960) (Friendly, J.)(holding that the meaning of "'chicken' in a contract was to be determined objectively);Raffles v. Wichelhaus, (1864) 159 Eng. Rep. 375, 377; 2 Hurl. & C. 906, 907-08 (holding thatthere was no mutual assent when there was a misunderstanding with respect to the ship thatwould deliver the cotton that was being purchased under the contract).

99 Joseph M. Perillo, The Origins of the Objective Theory of Contract Formation andInterpretation, 69 FORDHAM L. REV. 427,427 (2000).

ioo LAWRENCE M. FRIEDMAN, CONTRACT LAW IN AMERICA: A SOCIAL AND ECONOMIC CASE

STUDY 87 (1965) (citation omitted).

io See RESTATEMENT (SECOND) OF CONTRACTS § 20I(I) (I981) ("Where the parties have

attached the same meaning to a promise or agreement or a term thereof, it is interpreted inaccordance with that meaning."). Professor Hillman has noted that "[clourts have applied thisrule sparingly, however, because the issue rarely arises." Hillman, supra note 19, at 512 n.5 1.

102 RESTATEMENT (SECOND) OF CONTRACTS § 201 (1981).

1o3 Id § 201 cmt. b.

io4 See FRIEDMAN, supra note IOO; MORTON J. HORWiTZ, THE TRANSFORMATION OF

AMERICAN LAW, 1780-I86o, 196-98 (1977).io5 Hillman, supra note 19, at 511 (citation omitted).

io6 Empro Mfg. Co. v. Ball-Co Mfg., Inc., 87o F.2d 423,425 (7th Cir. 1989) (Easterbrook,

J.).

zo1o-20o111] 343


Another theory, advanced by Joseph Perillo, "is that objectiveapproaches have predominated in the common law of contracts sincetime immemorial," though "there was a brief but almost inconsequentialflirtation with subjective approaches in the mid-nineteenth century."' Incontrast to the economic thesis, Perillo maintains that "[t]he reason for thepersistence of objective approaches can be found in the legal profession'sdistrust of the testimony of parties.""o

II. A PROPOSED RULE FOR MEASURING DAMAGES IN

CASES INVOLVING MISUNDERSTANDING

The effect of these two axioms of classical contract law is that an awardof damages, in a case where the parties interpreted the breaching party'spromise in materially different ways, will put the injured party in theposition he or she would have been in based on an objective interpretationof the promise. The question presented in this Article is whether thereis sufficient justification for this measure of damages in, such a situation.This Article maintains that in such situations, the appropriate measureof damages is expectation damages, but based on the promisor's intendedmeaning of the promise, not how a reasonable person would interpretits meaning. If, however, an award based on the injured party's relianceinterest is greater than an award based on the promisor's intended meaningof the promise, the reliance interest should be protected.

When deciding whether a particular state-imposed sanction against aperson is advisable, consideration should be given to both deontologicaland consequential considerations. Thus, consideration should be given to(1) whether the person acted wrongfully (including the degree of wrongfulconduct); and (2) whether the sanction will improve society's welfare.1'Taking into consideration both of these factors, an award of expectationdamages based on the objective theory, when there was a contractualmisunderstanding, is not warranted.

With respect to a deontological approach, if one accepts Fried'sargument that an award of expectation damages is appropriate because itimplements the notion that the enforcement of contracts is premised onthe will of the promisor,110 an award of expectation damages based on aninterpretation of the promisor's promise that differs from the promisor'sintent would be illogical. In such a situation, the promisor has chosen onlyto provide the promisee with what the promisor believes he or she has

107 Perillo, supra note 99, at 428.io8 Id. at 477.io9 "People want their society to be and look just." ROBERT NozICK, ANARCHY, STATE, AND

UTOPIA 158 (1974). Accordingly, to increase the likelihood that a law "be just" or "look just,"consideration should be given to each of the leading approaches to moral questions.

I1o See FRIED, supra note 22,at 17.

[Vol. 99344


promised. Any liability at all in such a situation is more akin to liabilitybased on negligence. Thus, an award protecting the reliance interest wouldbe more appropriate than an award protecting the expectation interest,and an award of expectation damages based on the objective theory wouldarguably constitute punitive damages, which are usually not awarded fora breach of contract."' Accordingly, those who follow Fried's "contractas promise" theory cannot object to a recovery that is less than an awardprotecting the expectation interest under an objective theory of contractformation. In fact, an award based on the promisor's intended meaning ofthe promise is fully consistent with the notion of "contract as promise," andavoids (at least to an extent) the inconsistency between the "contract aspromise" theory and the objective theory of contracts.

The rule proposed by this Article should also not offend law andeconomics adherents. Law and economics scholars, who focus on theconsequences of adopting a particular remedy," 2 support the expectationdamages measure because it forces the promisor to internalize the promisee'slosses from failing to receive the performance."' Accordingly, the promisor'sdecision whether to breach will be efficient because the promisor will havean incentive to breach only if non-performance (including providing thepromised performance to a third party) is worth more than performance."'This is known as the "theory of efficient breach.""' Protecting theexpectation interest might also provide the promisor with the incentive totake the appropriate amount of precautions to avoid a breach." 6

This analysis, however, is not well suited for a contract involving amisunderstanding of the promised performance. In such a situation, thereis no reason to believe that the parties have even entered into a "value-maximizing" exchange."' As Judge Posner has noted, "[t]he 'subjective'theory of contract, which holds that there must be an actual meeting of

iii See RESTATEMENT (SECOND) OF CONTRACTS § 355 (1981) ("Punitive damages are not

recoverable for a breach of contract unless the conduct constituting the breach is also a tort for

which punitive damages are recoverable.").

112 See Craswell, supra note 16, at 107 (noting that economic analysis "asks what

consequences will follow from adopting this remedy or that").

113 POLINSKY, supra note 61, at 35.

14 Id. at 35-36; see John H. Barton, The Economic Basis of Damages for Breach of Contract,

i J. LEGAL STUD. 277, 282 (1972); Robert L. Birmingham, Breach of Contract, Damage Measures,

and Economic Efficiency, 24 RUTGERS L. REV. 273, 285 (1970); Steven Shavell, Damage Measures

for Breach of Contract, II BELL J. ECON. 466,470 (1980).

115 See Craswell, supra note 16, at io8 ("This effect-the effect on the incentive to per-

form a contract or to break it-has since become famous as the 'theory of efficient breach."'(citation omitted)).

116 Id. at 1o9.

117 POSNER,supra note 50, at ioi;seeid. at 103-04 ("Because the parties had a differentunderstanding of what the contract was, there was no basis for thinking that enforcing the

contract would maximize value . . . .").

2o1o- 20I1I11 345


the minds of the contracting parties for an enforceable contract to arise,thus makes economic sense.""' Accordingly, an exchange involving amisunderstanding is worth less protection from a utility standpoint thana contract with no misunderstanding. Law and economics adherentssupport the objective theory of contracts not because contracts based onmisunderstanding are value-maximizing, but to deter future communicationfailures."9 In fact, as Posner acknowledges, when a party who is at faultfor a contract misunderstanding refuses to perform, the "refusal is morelike a tort than a breach of contract,"' suggesting that reliance damageswould be appropriate. Accordingly, there is no justification from a law andeconomics standpoint to award expectation damages based on an objectiveinterpretation of the breached promise.

In fact, law and economics scholars acknowledge that an award ofexpectation damages encourages over-reliance by the promisee."' If thepromisee knows his or her expectation interest will be protected in theevent of a breach, the promisee will have an incentive to incur relianceexpenditures that will result in a large profit if the promisor performs,without taking into account the chance of a breach. 2 Incurring suchexpenditures without taking into account the chance of breach thusencourages inefficient reliance."' Under the rule proposed in this Article,the smaller remedy for cases of misunderstanding will not eliminate suchinefficient reliance, but it will reduce it to an extent.

With respect to Fuller's suggestion that an award protecting theexpectation interest might be a proxy to protect the reliance interest, in asituation where the parties attached materially different meanings to thebreached promise, it is unlikely the injured party would have been ableto have secured a contract (as interpreted by the injured party) at a similarprice. That the promisor misunderstood what was being promised (viewedobjectively) suggests that the price for performance was lower than it wouldhave been had the promisor intended the promise to be as the injuredparty interpreted it. Accordingly, it is unlikely that the expectation interestand the reliance interest will merge in the case of a misunderstanding.As Fuller acknowledged, his suggestion that the reliance interest and theexpectation interest will often be the same is strongest "in a hypotheticalsociety in which all values were available on the market;" 2 4 but, in the caseof a misunderstanding, it is unlikely the same performance at the same

118 Id. at ioi.

i19 Seeid.at io2.120 Id.

12I See POLINSKY, supra note 61, at 37-39 (arguing that protecting either the expectationor reliance interest induces inefficient reliance investments by the promisee).

122 Id. at 37-39.

123 Id. at 38-39.

124 Fuller & Perdue, supra note 16, at 62.

346 [Vol. 99


price will be available.Regarding Fuller's suggestion that an award of expectation damages is

more likely to deter breaches of contract, an award of expectation damagesbased on the meaning intended by the promisor will not encourage manymore breaches than under an expectation damages award premised onthe objective theory of contracts. The difficulty faced by a promisor inconvincing a fact finder that he or she intended something other thanwhat an objective interpretation of the promise would suggest will notsignificantly alter the promisor's decision whether to breach. Similarly,with respect to Fuller's proposition that an award of expectation damagesencourages reliance on contracts, the likelihood of a promisor establishinga contractual misunderstanding will not be significant enough to alter apromisee's conduct in deciding whether (and to what extent) to rely on thecontract.

In fact, the rule proposed in this Article will reduce the likelihood of abreach because it encourages a party to ensure there is no misunderstandingwith respect to the other party's duties under the contract. A promisee whois aware his or her recovery will be less in the case of a misunderstandingwill have an incentive to make sure that the contract is written in a way thateliminates any potential misunderstandings with respect to the promisor'spromise. In turn, this will reduce the number of breaches because it willhelp eliminate breaches caused solely by the promisor misunderstandingits contractual duties.

An additional benefit of the proposed rule is that it takes account of theerror rate in litigation. Particularly in those situations in which the judge orthe jury concludes that the parties interpreted a promise differently, thereis a fair chance that the judge or jury has reached the wrong conclusion asto which interpretation is more reasonable, or whether the injured partyactually held the interpretation claimed by him or her. Accordingly, a rulethat awards expectation damages based on the promisor's intended meaningof the promise mitigates the harshness of liability in those situations inwhich the judge or jury has reached an erroneous conclusion.

The possibility that the objective theory of contracts is based on theneeds of the market economy does not dictate a rejection of the ruleproposed in this Article. The fact that liability would still be based on theobjective theory would encourage parties to rely on contracts. The offeredrule is limited to the issue of damages, and it would be rare that a promisorcould convince a fact finder that he or she intended his or her promise tomean something that would be an unreasonable interpretation. Accordingly,the proposed rule would have a negligible effect on the incentive to rely oncontracts.

The argument that the objective theory of contracts is premised onthe legal system's distrust of the testimony of parties raises, however, aproblem for this Article's proposed rule. A detriment to the rule offered by

2o1o-2on1] 347


this Article is that it might encourage parties to testify that they interpretedtheir promises in ways that would not be objectively reasonable. Underthe proposed rule, such evidence could not be excluded on irrelevancygrounds.'25 Thus, there might be a danger of fact finders being swayedby perjured testimony. But this concern is not a significant one. Becausesuch testimony would be relevant only to the issue of damages, and not toliability, and because the likelihood of a factfinder concluding a promisorintended an unreasonable meaning will be slight, the incentive to makesuch an argument would be limited to cases in which there is substantialevidence to support the promisor's position.

Accordingly, the proper measure ofdamages when the parties interpretedthe promise in materially different ways is an award designed to protect theinjured party's expectation interest, but based on the promisor's intendedmeaning of the promise, not a reasonable interpretation of the promise. If,however, an award protecting the injured party's reliance interest would begreater, the reliance interest should be protected. Otherwise, the injuredparty would receive no compensation in a situation in which the promisorperformed as he or she intended the promise. This would result in theadoption of the subjective theory of contracts. Also, because the promisorhas acted negligently, the injured party should at least be entitled to be putin the position he or she would have been in had the promisor not actednegligently. Such a recovery is necessary to deter negligent behavior.

III. HAWKINS v. McGEE AS A CASE INVOLVING CONTRACTUAL

MISUNDERSTANDING

Having established that the standard remedy for the breach of acontract should be modified when the parties attached materially differentmeanings to the broken promise, this part of the Article provides the resultsof an analysis of the most famous expectation damages case-Hawkins v.McGee'16-and shows that contrary to popular perception, the case involveda contractual misunderstanding. Accordingly, although the measure ofdamages in Hawkins should have been determined by the expectationinterest, the expectation interest should have been based on Dr. McGee'sintended meaning of his promise.

Law students' and law professors' information about the facts in Hawkins

125 See, e.g., FED. R. Evio. 402 (providing that "[evidence which is not relevant isnot admissible"). Presumably, however, such evidence should be admissible to determinewhether there was a misunderstanding. See RESTATEMENT (SECOND) OF CONTRACTS § 20I(I)

(1981) ("Where the parties have attached the same meaning to a promise or agreement or aterm thereof, it is interpreted in accordance with that meaning."); see also Kabil Dev. Corp.v. Mignot, 566 P.2d 505 (Or. 1977) (holding that it was not erroneous for trial court to admittestimony regarding subjective belief that a contract had been formed).

126 Hawkins v. McGee, 146 A. 641 (N.H. 1929).

348 [Vol. 99


v. McGee comes primarily from four sources: (1) Justice Oliver WinslowBranch's opinion for the New Hampshire Supreme Court;z 7 (2) the Courtof Appeals for the First Circuit's decision in McGee v. United States Fidelity &Guaranty Co."' (a subsequent lawsuit by Dr. McGee against his insurancecarrier); (3) Jorie Roberts's 1978 article in the Harvard Law Record aboutthe case;' 9 and (4) John Jay Obsorn, Jr.'s use of the case in the openingscene of his 1971 novel The Paper Chase,'30 as well as the use of the case inthe opening scenes of the movie'3' and the pilot in the television series.' 32

But based on my review of the trial transcript, the story that emerges fromthese sources is misleading in several respects, including the condition ofGeorge Hawkins's hand prior to the operation, whether he and his fatherwanted the operation, and whether the operation was in any sense a success.The likely truth with respect to each of these aspects reveals that the caseinvolved a misunderstanding between the parties, which is much differentfrom how the facts of the case are usually portrayed.

A. The Traditional Story

The traditional story is that Dr. Edward R. B. McGee, a generalpractitioner in Berlin, New Hampshire,' learns of young George Hawkins'sscarred hand before Dr. McGee served as a doctor in Europe in World WarI.' While in Europe during the war he observes skin grafting operationson German soldiers,'35 and after returning from the war requests permission

127 Id. at 642.

128 McGee v. U.S. Fid. & Guar. Co., 53 Ead 953 (ist Cir. 1931).129 Jorie Roberts, Hawkins Case:A Hair-RaisingExperience, HARv. L. REC., Mar. I7, 1978,

at I.

130 TIE PAPER CHASE BOOK, supra note 2, at 6-9.

131 TYIE PAPER CHASE (Twentieth Century Fox 1973) [hereinafter THE PAPER CHASEMOVIE].

132 The Paper Chase (CBS television broadcast Sept. 9, 1978) [hereinafter The Paper ChaseTelevision Series]. The case is included in several Contracts casebooks. JOHN P. DAWSON, ET AL.,CONTRACTS: CASES AND COMMENT 2 (9th ed. 2oo8); RANDY E. BARNETT, CONTRACTS: CASES AND

DOCTRINE 63 (4th ed. 2oo8); LON L. FULLER & MELVIN ARON EISENBERG, BASIC CONTRACT LAW19o (8th ed. 2006). The latter two include as a squib case the decision in AlcGee v. UnitedStatesFidelity & Guaranty Co., 53 F.2d 953 (1st Cir. 1931), and an excerpt from Jorie Roberts's article.Barnett, supra, at 66-70; Fuller, supra, at 193-97. The case is included in these casebooks todemonstrate that the primary purpose of contract damages is to protect the non-breachingparty's expectation interest. The first casebook to use the case was apparently Lon Fuller's

1947 casebook. See Frost, supra note 8, at 1361 (noting that the use of Hawkins v. AlcGee "tracesits lineage back to the first edition of Fuller's influential casebook" (citation omitted)).

133 For a background of Berlin, New Hampshire, see Linda Upham-Bornstein, Citizenswith a "Just Cause": The New Hampshire Farmer-Labor Party in Depression-era Berlin, 62 HIsT.N.H. 117, 118-21 (2oo8).

134 Roberts, supra note 129, at 7.135 Id.

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from Charles Hawkins (George's father) to perform an operation on George1 6

because he wants to experiment with skin grafting."' Charles and Georgeare pursued by Dr. McGee for three years,"' even though George doesnot need the operation because his scar is just a "small pencil-size scar""'that "dloes] not substantially affect his use of the hand,"'" and in fact hishand "[is a practical, useful hand"'41 (he even won several medals for hismarksmanship ability).142 In an effort to convince Charles and George toconsent to the operation, Dr. McGee misrepresents his ability to undertakea skin-grafting operation,'43 and further misrepresents that he performedsuch operations on German soldiers during the war.'" Dr. McGee, in aneffort to obtain Charles's and George's consent, exploits George's insecurityabout his hand by emphasizing the social problems it will cause him inthe future. 4 He also promises George that the surgery will result in "ahundred per cent perfect hand or a hundred per cent good hand;"' that he

136 See id. ("During this period, the family physician, Edward McGee, while treating oneof George's younger brothers for pneumonia, also became aware of George's scarred hand.Later, in 1919, after returning from several years of medical service in Europe during WorldWar I, McGee requested George and his parents to let him operate on the hand in order torestore it to'perfect' condition.").

137 See Hawkins v. McGee, 146 A. 641,643 (N.H. 1929) ("[Tlhe theory was advanced byplaintiff's counsel in cross-examination of defendant that he sought an opportunity to'experi-ment on skin grafting' ...... "); U.S. Fid. & Guar, 53 F.2d at 954 (quoting the plaintiff's allega-tion in the complaint that Dr. McGee "experimented upon said plaintiff ");'ThE PAPER CHASE

BooK, supra note 2, at 7 (portraying the facts as involving Dr. McGee wanting to "experimentin skin grafting"); ThE PAPER CHASE MOVIE, supra note 131 (same); The Paper Chase TelevisionSeries, supra note 132 (same).

138 See Roberts, supra note 129, at 7 ("McGee encouraged the Hawkinses to allow himto operate on the hand for three years . . . ."); Hawkins, 146 A. at 643 ("There was evidencethat the defendant repeatedly solicited from the plaintiff's father the opportunity to performthis operation, and the theory was advanced by plaintiff's counsel in cross-examination ofdefendant that he sought an opportunity to 'experiment on skin grafting,' in which he hadhad little previous experience.").

139 Roberts, supra note 129, at 7 (quoting Howard Hawkins, one of George's youngerbrothers) (internal quotation marks omitted).

140 Id.

141 U.S. Fid. & Guar, 53 F.2d at 954 (quoting the plaintiff's complaint describing thecondition of the hand prior to the operation).

142 Roberts, supra note 129, at 13.

143 U.S. Fid. & Guar, 53 F.2d at 954 (quoting the plaintiff's allegation in the complaintthat "the defendant did not possess the skill that he held himself out to possess").

t44 Roberts, supra note 129, at 7.

145 See id. ("[Dorothy] St. Hilaire (George's younger sister) recollects that McGee, inpersuading George to undergo the surgery, emphasized the social problems which his scarredhand might create." (internal parenthetical added)).

146 Hawkins v. McGee, 146 A. 641, 643 (N.H. 1929) (internal quotation marks omitted)("The only substantial basis for the plaintiff's claim is the testimony that the defendant alsosaid before the operation was decided upon,'I will guarantee to make the hand a hundred percent perfect hand' or a 'hundred per cent good hand."').

[Vol. 99350


will be left only with "a small scar, [that] would hardly be noticeable afterhealing;"'4" and that he would not be in the hospital for more than four daysand that a few days thereafter he could return to work.1'

Despite George's parents' doubts, as a result of Dr. McGee's pressure,George consents to the operation upon turning eighteen.149 Dr. McGee,having misrepresented his experience with skin-grafting operations,botches the surgeryso (including using skin from George's chest"s' insteadof his thigh as he had originally represented he would do),'s leavingGeorge's hand "permanently disfigured and crippled."s 3 As a result of theoperation, the hand is left partially curled-up, it is filled with "dense mattedhair,"1 4 it "continue[s] to bleed ... throughout his life,"' and it is rendered"useless."' 6 Although "'George was very bright,""5 s his embarrassment ofhis hand causes him to never return to high school,' and his "crippledhand affected his employment and outlook throughout his lifetime."5 9

B. Another Side of the Story

But there must be another side to this story. We know that the first

147 U.S. Fid. & Guar, 53 F2d at 954 (quoting the plaintiff's allegation in the complaint).

148 Hawkins, 146 A. at 642.

149 U.S. Fid. & Guar, 53 E2d at 954 (quoting the plaintiff's allegation in the complaintthat he relied upon Dr. McGee's promises in consenting to the operation and would not haveotherwise consented to the operation); Roberts, supra note 129, at 7 ("George agreed shortlyafter his i8th birthday. St. Hilaire remembers that, while her parents had strong doubts aboutthe operation, they trusted McGee's judgment and were hesitant to oppose George's decisionand the physician's advice.").

150 Professor Frost states that the case portrays Dr. McGee as "the incompetent sur-geon." Frost, supra note 8, at 1363.

151 Hawkins, 146 A. at 642 (noting that the skin for the graft was taken from George'schest).

152 Roberts, supra note 129, at 7 ("McGee had earlier stated that the skin for the graftwas to come from George's thigh....").

153 Id. at i.

154 THE PAPER CHASE BOOK, supra note 2, at 7; see also U.S. Fid. & Guar., 53 Fzd at 954(quoting the complaint's allegation that the skin grafted to George's hand "became matted,unsightly, and so healed and attached to said hand as to practically fill the hand with an un-sightly growth"); Roberts, supra note 129, at 7 ("[T]he post-operation scar covered his thumband two fingers and was densely covered with hair.").

155 Roberts, supra note 129, at 7.156 U.S. Fid. & Guar., 53 F2d at 954 (quoting the complaint's allegation that the skin

grafted to George's hand "restrict[ed] the motion of the plaintiff's hand so that said hand hasbecome useless to the plaintiff").

157 Roberts, supra note 129, at 13 (quoting Howard J. Hawkins, George's brother).

i58 Id.159 Id.

2010-2011]1 351


trial resulted in a hung jury.16o Also, in the second trial, the judge (JudgeScammon) ordered a nonsuit on the negligence claim against Dr. McGee.' 61

The jury in the second trial, although returning a verdict in George's favoron the assumpsit claim, did not award a particularly large sum of money($3,000).16 The court found that even this amount was "excessive, and ...order[ed] that the verdict be set aside unless [George agreed] to remit allin excess of $500." 161 We know that despite the New Hampshire SupremeCourt ruling that the trial judge's jury instruction on damages erroneouslyprecluded George from receiving expectation damages,'" George settledthe case for only $1,400.16' After the trial Dr. McGee's practice apparentlygrew,'" and he was elected mayor of Berlin, New Hampshire, 16 hardlythings that could have occurred had the community believed he wasan incompetent surgeon who had pressured a teenager to consent to anoperation simply because he wanted to experiment with skin grafting. Wealso know that the New Hampshire Supreme Court recited the facts.in thelight most favorable to George;'" that the First Circuit relied significantlyon the allegations in George's state-court complaint;169 and that JorieRoberts's article was based primarily on interviews and correspondencewith George's relatives, whose information was premised on oral historyfavorable to George and was provided long after the events at issue.7 0

16o See U.S. Fid. & Guar, 53 F.2d at 954 ("At the first trial, the jury disagreed.").

161 Hawkins v. McGee, 146 A. 641, 642 (N.H. 1929) ("The writ also contained a countin negligence upon which a nonsuit was ordered, without exception."); see also U.S. Fid. &Guar., 53 F.2d at 954 ("[TIhe court directed a verdict for defendant on the [negligence] count

162 U.S. Fid. & Guar., 53 F.2d at 955; Roberts, supra note 129, at 7 ("The jury onlyawarded the Hawkins [sic] $3,000 for damages .....

163 See Hawkins, 146 A. at 641.

164 Id. at 644. ("We, therefore, conclude that the true measure of the plaintiff's damagein the present case is the difference between the value to him of a perfect hand or a goodhand, such as the jury found the defendant promised him, and the value of his hand in itspresent condition, including any incidental consequences fairly within the contemplation ofthe parties when they made their contract." (citation omitted)).

165 U.S. Fid. & Guar., 53 Ezd at 955. Roberts states that the settlement also includedGeorge's attorney's fees. Roberts, supra note 129, at 7 ("[Tlhe final settlement was for $1,400and lawyers fees.").

166 Roberts, supra note 129, at 13.167 Id.

168 See Hawkins, 146 A. at 641-44.169 See U.S. Fid & Guar., 53 F.2d at 954-55.

170 See Roberts, supra note 129, at i ("[Tihe RECORD has delved into the human aspectsbehind Hawkinsv. McGee through interviews and correspondence with George Hawkins' broth-er and sister-in-law Howard J. and Edith Hawkins, his sister Dorothy Hawkins St. Hilaire,and Berlin lawyer and [Harvard Law School] graduate Arthur J. Bergeron '32."). Roberts' 1978article was published nearly 5o years after Hawkins v. McGee was heard by the New HampshireSupreme Court. Id.

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My review of the trial transcript shows that the popular understandingof the events in Hawkins v. McGee is likely incorrect in several respects.First, the evidence shows that George's hand was contracted (at least tosome extent) prior to the operation,"' and that the hand's pre-operationcondition possibly caused him some difficulty (though likely not significantdifficulty)."' Second, the evidence shows that Charles Hawkins broachedthe subject of George's hand with Dr. McGee;"' Dr. McGee initially did notwant to perform the operation;1 74 and there was a much shorter time periodbetween this initial conversation and the operation than the three yearssubsequently alleged by the Hawkins family.' This casts considerabledoubt on the theory that Dr. McGee relentlessly pursued George and hisfather so that he could experiment with skin grafting. Third, the traditionaldescription of George's post-operation hand'7 6 fails to take into accountthat the hand's contracted condition (the correction of which might havebeen the operation's primary purpose) was likely improved. 77

These three facts ultimately lead to the conclusion that Dr. McGeereasonably believed George wanted the operation primarily to correct hishand's contracted state (not primarily for aesthetic purposes). Furthermore,if he promised George a one hundred percent perfect or good hand, helikely meant one hundred percent perfect or good only from the standpointof its contracted state.

1. The Burned Hand.-The popular conception is that George's pre-operation scar was small and did not affect the use of his hand."' Thisnotion supports the conclusion that George and his father did not want theoperation, and that Dr. McGee pressured them to agree to the operation(for three years), so that he could experiment with skin grafting (which hehad seen performed on German soldiers during World War I)."' But thetrial transcript and other evidence casts significant doubt on this popularconception of the condition of George's hand prior to the operation.

a. A Stormy Night, a Shocking Morning (and a Lawsuit to Follow)

On March 1, 1914, when George was ten years old, 8 0 there was a bad

171 See discussion infra Part III.B.i.b.

172 See discussion infra Part III.B.i.c.

173 See infra text accompanying notes 302-17.

174 See infra notes 324-25 and accompanying text.

175 See infra notes 302-03 and accompanying text.

176 See supra text accompanying notes 154-57.

177 See infra text accompanying notes 386-95.

178 See supra text accompanying notes 140-42.

179 See supra Part III.A.18o Transcript of Record at 2, 18, 30, 33, Hawkins v. McGee, No. 13724 (N.H. Super.

201O-20Il11 353


storm in his hometown of Berlin, New Hampshire."' As a result of thestorm, two electrical wires (one of which came into the Hawkins's house)were blown together and crossed, sending a strong current into the home.'The next morning,"' Charles sent George downstairs to start a fire.'" WhenGeorge stood on a chair and reached up to turn on the electric light inthe kitchen over the stove, he was badly burned on his right hand by an"electric spark."'"

George was treated by a doctor that morning. 186 The doctor dressed thehand and told Charles that there was not any need for him (the doctor) tocome again, that he would send a nurse to dress the hand, and that nothingmore was necessary.' The nurse came to the house and initially dressedthe hand about every day and then every other day for two or three weeks,' 8

and it took three or four weeks for the burn to heal.' 9

Shortly after the incident, Charles, as father and next of friend ofGeorge, brought suit against the Cascade Light & Power Co., the publicutility corporation in charge of the electrical wires.'" This is significantbecause it suggests that the pre-operation injury was severe enough to

Ct. Dec. 1926) (on file with the New Hampshire Superior Court, Coos County, the NewHampshire Supreme Court, and the author), vacated, 146 A. 641 (N.H. 1929). The evidenceof George's age at the time of the accident is conflicting, with the ages nine, ten, eleven, andtwelve years old having been reported. The writ filed in Hawkins v. Cascade Light & PowerCo. (the lawsuit filed at the time of the accident against the responsible party) stated thatGeorge was twelve, though it also incorrectly stated that his left hand had been burned. Writ,Hawkins v. Cascade Light & Power Co., (N.H. Super. Ct. Apr. 21, 1914) (on file with the NewHampshire Superior Court, Coos County, and the author). Roberts states that it happened in

1915 when George was eleven. Roberts, supra note 129, at 7. Charles testified that Georgewas ten, though it was in response to a question from his lawyer that included the age of tenin the question, Transcript of Record, supra, at 2, and it should be noted that Charles did notseem sure of George's age at the time of the trial. See id. ("He is about twenty-two." (emphasisadded)). George testified that he was "[a]bout ten years old," and "[bjetween nine and ten."Id. at 33. George's attorney later stated George was nine years old at the time of the accident.Id. at 127 (attorney Coulombe stating "he was about nine years old"). We know that the ac-cident occurred on March 2, 1914, from the writ filed in Hawkins v. Cascade Light &Power Co.Writ, supra; see also Transcript of Record, supra, at 137. If George was born in January 1904,Roberts, supra note 129, at i ("George Hawkins was born in January, 1904"), he was ten yearsold at the time of the accident. Accordingly, the best evidence supports the conclusion thatGeorge was ten years old at the time of the accident.

181 Transcript of Record, supra note i8o, at 2, 100.

182 Id. at 2-3, 17.183 Id. at oo; Writ, supra note 18o.

184 Transcript of Record, supra note i8o, at ioo.

185 Id. at 2, 17-18, 33, 100, 120 (right hand).

186 Id. at 3, 29.

187 Id. at 29-30.

188 Id. at 30.189 Id. at 3, 30, 33, 49-

190 Id. at 19; Writ, supra note i8o.

[Vol. 99354


have warranted a lawsuit. Also, the Hawkins family members reported thatCharles took George to skin specialists in Montreal after the accident (whoadvised against taking any action to restore the hand),19' suggesting thatCharles considered the injury to be severe. In fact, an expert called byDr. McGee testified that George's burn would have been a third-degreeburn,'92 and Dr. Homer M. Marks, who assisted with the first operation,'93

agreed that it was a third-degree burn.'94 Additionally, as discussed below,as time went by, the hand's condition likely worsened as a result of theburn.

b. The Burned and Contracting Hand

The testimony in Hawkins v. McGee includes extensive testimonyregarding the condition of George's hand prior to the operation by Dr.McGee. As shown by a summary of the testimony below, there is no disputethat the burn caused his hand to start to contract prior to the operation.Accordingly, it is unlikely that Dr. McGee's operation was the cause ofGeorge's hand being contracted.

The burn left a scar that ran across the palm of George's right hand.'95

George, Charles, and Rose (George's mother) described it as a scar that "ranacross the palm" of his hand from the bottom of a finger to the bottom ofthe thumb, and that it was raised like a ridge about the size of "half a leadpencil."'9 Dr. Leith, an expert called by Dr. McGee, who only inspectedthe hand after the operation,197 testified that in its pre-operative state the"scar not only extended from the base of the second finger to the base of thethumb, it also extended in another direction, at an angle across the palm."' 98

George testified that the scar was perhaps a little darker than ordinary skincolor,'" whereas Charles and Rose testified that it was dark.2" George andRose testified that it was not an "awfully bad looking hand" and was not"repulsive" looking.z0' Ethel Oldham, who appears to have been a friend ofthe Hawkins family,202 described it as a small scar across his hand, 203 "about

191 Roberts, supra note 129, at 7.192 Transcript of Record, supra note I8o, at 92,94.

193 Id. at II9-20.

194 Id. at 125.

195 Id. at 3,50.

196 Id. at 3, I8, 28, 30-31,34.

197 Id. at 91.

198 Id. at 92.

199 Id. at 34.

200 Id. at 3, 31.

20I Id. at 33, 50.

202 She went with Rose to visit George in the hospital after the operation. Id. at 6o.

203 Id. at 59.

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the size of half a lead pencil,"" running from the bottom of a finger to thebottom of his thumb"os and darker than his natural skin color.zos

Dr. McGee testified that it was a "deep injury down into the deeperstructures, destroying the palmar fascia," 0 going down to the ligamentscovering the bone,2 0s and that the resulting scar was "much larger than thesize of a pencil."2 0 Dr. Marks testified that the palm of George's hand wasessentially all scar tissue, "about the size of a dollar."210

With respect to whether the hand was contracted prior to the operation,George and Charles admitted that a finger was "drawn in,"2 " and Charlesacknowledged that the hand was drawn in slightly.2 1

2 George testified thatthe hand was contracted possibly at an angle of five degrees, with the thumbpulled in "possibly a quarter or half an inch" toward his palm. 13 HaroldC. Sullivan, who appeared to be a friend of George's and who knew himsince George was twelve or fourteen,2 " described the injury as a "cord thathad been burned and contracted," and "[it seemed to cup the hand.""'William E. Sawyer, who knew George prior to 1922, testified that the handhad a "contraction,"2"6 and that a finger and the thumb were somewhatdrawn in together."'

Dr. McGee testified that when he saw the hand in 1921, it was"contracted and deformed.""' Alberta W. Wight, a neighbor who was calledby Dr. McGee at trial, testified that she inspected George's hand before theoperation, and that it was "decidedly" repulsive and had the appearance ofa "dwarfed hand."" She testified that

[ilt seemed to be greatly drawn together from the sides, giving it a verynarrow appearance, and there was a finger ... which was drawn in a greatdeal. Now the thumb was drawn in also; there was a ridge across his handacross the palm, but it had the appearance of the palm being largely gone,-

204 Id. at 61-62.205 Id.

2o6 Id. at 62.

207 Id. at 88.2o8 Id.

209 Id. at 79.210 Id. at 127.

21I Id. at 4,18, 27,34.

212 See id. at 18-19.

213 Id. at50.214 Id. at 64.

215 Id. at 65-216 Id. at 66.

217 Id. at67.218 Id. at 69.

219 Id. at 1o.

356 [Vol. 99


as though it had been burned out.zo

At the first trial, Wight testified that she had seen his hand out of herwindow when he would walk along the street in front of her house andthat he appeared to have a "withered hand."221 Elizabeth B. Stewart,one of George's schoolteachers from 1916 to 1919, testified that he had a"deformed hand."m22

Edward James Halloran, foreman at the mill where George worked, 23

testified that the hand was "slightly cupped" and was "pretty wellcontracted."224 Dr. Leith testified that "th[e] middle finger, ring finger, wasdrawn in," that the "thumb was drawn in," and that the palm was "cupped"or "contracted."225

Dr. McGee testified that as George grew older, his hand contracted asa result of the scar not growing along with the hand.226 Dr. Leith similarlytestified that the hand would contract as it grew, pulling in the "parts ateither end of the scar." 2 Dr. Marks testified as well that the burn wouldhave drawn George's hand together as he grew older.228 He testified thatthe second finger and the thumb were drawn inward as a result of the

heavy strong cord of fibrous [scar] tissue . . . almost as though a piece ofrope was stretched under the skin, pulling it up like the ridgepole of a tent,and from this cord extending in either direction toward the outer side ofthe hand and toward the center was quite a large area of scar tissue. Thatscar tissue had caused contraction there so that the palm of the hand wascupped; the thumb drawn in, the second finger drawn in .... 29

John M. Dresser, an officer and surgeon in the State Guard, testified thatGeorge showed him his hand and the "fingers were contracted."2 1

The testimony of Dr. McGee and Dr. Marks regarding the purpose ofthe operation, and the operation procedure itself, supports the conclusionthat George's hand was contracted prior to the operation. Dr. McGee,when explaining the procedure used on George, testified that if doctorssimply removed the scar tissue without grafting any skin on it, the resultwould have been a worse scar than the one already there, and with more

220 Id.

221 Id. at 102.

222 Id. at io8.223 Id. at io8-o9.

224 Id. at 109.

225 Id. at 92.

226 Id. at 69.227 Id. at 92.

228 Id. at 120.

229 Id.

230 Id. at 138.

20IO-20II1 357


contractions. 31 Dr. Marks testified that

the purpose of this operation was to remove the scar tissue, and to releasethe contractions, and to break up the adhesions in the hand, to restore it sofar as possible to its normal function, with the idea in view of later coveringin the denuded area with some sort of a skin graft.232

With respect to the operation procedure, Dr. McGee testified that aftercutting out the scar and the affected tissue 33 he tried to straighten outthe hand, but because of the length of time it had been contracted, it wasdifficult to do, and he could not get the hand as straight as he would haveliked.23 Dr. McGee then put the hand "into a sort of padded splint" tohold it in a straightened position for about a week, because without thehand would have returned to its pre-operation contracted condition.3 Dr.Marks confirmed that the hand was "dressed and put . .. in splints" afterthe operation to maintain the position they had achieved.2 6

Dr. Marks testified that he and Dr. McGee "worked on the hand along time until all the scar tissues that appeared on the surface so far aswe could see, was removed, and until this right hand,-until this secondfinger was so far freed that it assumed pretty nearly its normal position andmotion."" He testified that it was impossible to free the thumb to obtainfull motion, but that it was improved by fifty percent or more.3 Dr. Markstestified that after the scar tissue was dissected as much as possible, theyattempted by "stretching and manipulati[on]" to "break up what adhesionswere left too deep" and to "flatten out the palm and restore it, so far aspossible, to its normal position." 39 He testified that if a second operationinvolving the skin graft was not performed, new scar tissue would haveformed and the contractions and adhesions that had existed before wouldhave returned."

The testimony summarized above shows that George's hand wascontracted prior to the operation, at least to some extent. This casts doubton the assumption that Dr. McGee's operation caused George's handto contract. Rather, evidence supports the conclusion that one of theoperation's purposes (and perhaps its primary purpose) was to relieve thehand of its contraction.

231 Id. at 70.

232 Id. at 120.

233 Id. at 79.

234 Id. at 71-72.

235 Id. at 72.

236 Id. at 121.

237 Id.

238 Id.

239 Id.

240 Id. at 121-22.

358 [Vol. 99


c. A Burned, Contracted, and Useful Hand?

Not surprisingly, George testified that his right hand, after the burn,was "just as useful" as it had been before the burn, that it did not haveany tenderness or pain, and that it never bothered him or interfered withwork or play.241 Charles testified that George never complained about thehand,2 42 and that as far as use, it was a good hand.2 43 George testified that heenjoyed camping, and during one such trip was apparently photographedcarrying two pails of water, which he did without difficulty.2" Rose testifiedthat the injury did not affect George; rather, "[h]e played ball, and he wasa good rifle shot; he skiied [sic] . . .could pitch and paint and cut wood."2 45

She testified that he played around with the other boys, and she neverheard him say that he could not do something the other boys could.246 Shealso testified that she never heard him complain about the hand.247

George testified that he skied and performed all kinds of sports, andwas also proficient in shooting with his right hand." Harold Sullivan hadbeen out shooting with him two or three times, and testified that Georgewas a "very good" shot with a pistol.2 49 Sullivan also saw him on skis,so andtestified that he did not see him having any difficulty. 51 William E. Sawyer,who served with George in the New Hampshire State Guard, testified thathe had been in the woods shooting with him, and George was a "very goodshot." 52 He also testified that he never noticed George having any difficultyusing his right hand and never heard him complain about it. 53

One of the bases for believing that George's pre-operation scar wasnot a significant impairment was the fact that he reputedly "won severalmedals as a marksman for the State Home Guard."254 This assertion by theHawkins family after George's death is not supported by the trial transcript,and if it were true, it would surely have been revealed during the directexamination of George. It is true, however, that he was a member of the

241 Id. at 34,49-50.

242 Id. at 3.243 Id. at 27.

244 Id. at 42.

245 Id. at 31.

246 Id.

247 Id. at 33.

248 Id. at 41.

249 Id. at 64-65.250 Id. at 64.251 Id. at 65.252 Id. at 66.

253 Id.


2o1o-20orI1] 359


New Hampshire State Guard,2"s an infantry unit that was formed duringWorld War 1.2s6 George testified that he was a member of the Guard for twoyears,"' and Harlan J. Cordwell, who had been a captain in the Guard,5 'confirmed that George had been a member of the company.zs9

Although there is no evidence in the trial transcript that George wonmedals for his shooting, the mere fact that George was a member of theGuard suggests that his injured hand was not significantly debilitating. Tobecome a member of the Guard, George was required to pass a physicalexamination, and he testified that he was examined by Dr. Tappan Pulsiferand passed one hundred percent.260 John Dresser, an officer and surgeon inthe Guard, recalled having a conversation with Dr. Pulsifer about passingGeorge, and they understood he was a good shot. 6 '

As a member of the Guard, George drilled with a rifle, and handledthe rifle with his right hand. 6 z George testified that he had no difficultydrilling. 6

1 Captain Cordwell similarly testified that George did not haveany difficulty handling his gun or drilling.2 * William E. Sawyer, who was amember of the Guard with George, likewise testified that he never noticedGeorge having any difficulty drilling.26 s George was ranked as a marksman,and when an eight-person rifle team was assembled to compete in Concord,New Hampshire, for a shooting competition, George was selected" becausehe had one of the "best shots."267 This is the likely source of the Hawkinsfamily's assertion that George won medals for his shooting.

John Dresser testified, however, that he noticed that George "held hisrifle clumsily" and told him so and demonstrated to him how it was tobe held. George told him that he could not hold the rifle in that positionbecause "of a slight deformity of his hand." 68 Dresser testified, though,that George was still considered a "very good shot." 69

Accordingly, the evidence regarding George's service in the Guard

255 Transcript of Record, supra note i8o, at 41.

256 Id. at 56, 66. His attorney suggested that he enlisted on December 22, 1919. Id. at

57.257 Id. at 41.

258 Id. at 55-56.

259 Id. at 56.

26o Id. at 41, 133.

26I Id. at 138-39.262 Id. at 41.263 Id.

264 Id. at 56.265 Id. at 66.266 Id. at41, 56.

267 Id.

268 Id. at 137-38.269 Id. at 138.

36o [Vol. 99


does not support the Hawkins family's assertion that he was such a goodmarksman that he won medals, but it does support a conclusion that hishand was not sufficiently impaired that it precluded him from passing therequired physical or from being a good shot. Dresser's testimony suggeststhat George's hand required him to hold the rifle in a position other thannormal, but this did not affect his shooting ability.

George's work history suggests that although his hand did not causehim problems with shooting, it might have caused him problems in otherways. When George was sixteen or seventeen he left school, and aroundthe age of seventeen. he went to work.270 For brief periods in 1918 and1920, George worked at the Brown Company Sulfite Mill"' as a "commonlaborer." 7 z He also worked at the Cascade Mills around 1921 or 1922,73 andhe was working there at the time of the surgery."'

George testified that the work required the use of both hands, and thathe did not have any trouble doing the job.275 A coworker similarly testifiedthat George did not have any trouble doing his job.16 William E. Sawyer,who worked with George at the Cascade Mills, never noticed him havingany difficulty with the job.277 At the time of the operation, Michael Moffett,the person to whom George's supervisor (Edward Halloran) reported,"2

testified that he did not recall Halloran complaining to him about McGee'swork.7 9

Halloran, however, testified that George would often drop sheets ofpulp, and when he asked him what was wrong (because Halloran had alsobeen receiving complaints from superiors), George responded, "I have gota bum hand." 2s0 Halloran testified that George's work was unsatisfactory,and he shifted him to a different position (wrapping), but his wrappingwas "unsatisfactory" too, and Halloran received complaints.2 1

1 When hespoke with George, George allegedly told him that "he was doing the besthe could; that he wanted to get money enough to have an operation, and[Halloran] told him ... 'go ahead ... and I will do what I can."' 8 2 Halloranlater testified that he told him, "'I will do everything I can by you, go ahead

270 Id. at 3, 34.

271 Id. at 117-18.272 Id. at 3, 19, 34-35.273 Id. at 3, 34, io8.

274 Id. at 31.

275 Id. at 34.276 Id. at 135.

277 Id. at 67.278 Id. at 43, 133.279 Id. at 134.

280 Id. at lo8-9 (internal quotation marks omitted), 114.

281 Id. at 109,113.

282 Id. at 1o9.

20IO- 20I II 361


and do anything that you can, and I will get you through."'2 " AlthoughGeorge testified that he had no trouble with this work, ** he confirmedthat he had a talk with Halloran during which Halloran agreed to let himcontinue working despite his unsatisfactory performance. 8 This suggeststhat George did, in fact, have some trouble working as a result of his hand.

Elizabeth B. Stewart, one of George's schoolteachers from 1916 to 1919,taught George typewriting, among other subjects." She testified that hishand caused him to type in an unusual manor, by pushing from the wristinstead of from the knuckles,"' which made typing difficult and causedhim to fail the state typing test (which he later passed).8 8 When she tried tocorrect his mechanics, he said he could not type differently because of hishand.8 9 She also testified that he held his pen and pencil in an unordinaryway, and "there seemed to be a stiffness in his fingers," though his writingwas fair or good considering he had a "deformed hand."2"

Dr. Marks testified that the pre-operation contraction of the hand wouldhave affected its usefulness." Dr. Leith testified that George had also lostthe use of the end of his thumb, which he believed was the result of a"deficient nerve supply" caused by the burn.292

Thus, the contracted condition of George's hand prior to the operationreportedly caused him some difficulties, though these difficulties do notappear to have been significant. If, however, George was still growing atthe time of the operation, his hand was likely continuing to contract, andthe contracting condition might have started to cause him greater problemsthan it had in the past."

d. The Burned, Contracted, and Fairly Useful Hand

In conclusion, the trial testimony (and other evidence), viewed as awhole, suggests that George's burn was significant enough in 1914 to causehis father to file a lawsuit against the Cascade Light & Power Co. The burncaused George's right hand to contract somewhat as he grew older, andthe injury likely caused him to have difficulty performing certain tasks attimes. Although the extent of the difficulties do not appear to have been

283 Id. at 115.

284 Id. at 35.285 Id. at 136.

286 Id. at 105.

287 Id.288 Id. at 1o5-o6.289 Id. at io6.

290 Id. at io6-o8.

291 Id. at 121.

292 Id. at 93.293 See supra noteS 227-23I and accompanying text.

362 [Vol. 99


significant, they might well have increased as George grew older.

2. An Experiment?-The traditional story is that Dr. McGee learnedof George's burn prior to World War I, and after returning from the warrequested permission to operate on the hand so that he could experimentwith skin grafting. To convince Charles and George, he told them that hehad performed skin grafts on soldiers in Germany during the war, thoughhe later admitted this was untrue. For three years he encouraged them topermit him to operate, emphasizing the social problems the hand wouldcause George and promising to give him a one hundred percent perfect orgood hand. Finally, when George turned eighteen, he consented.

But, the fact that George's hand was contracted somewhat prior to theoperation, and the fact that it likely caused him some difficulties, suggeststhat George and his father may have been interested in having the operationperformed. If this is true, the traditional view that Dr. McGee had to use yearsof pressure as well as misrepresentations to convince Charles and Georgeto have the operation is inaccurate. In fact, as discussed below, a review ofthe trial testimony provides no support for the conclusion that Dr. McGeepursued Charles and George for three years, making misrepresentationsand promises so that he could experiment with skin grafting.

Dr. McGee graduated from the University of Vermont Medical Collegein 1904,A opened a practice as a physician and surgeon in Berlin, NewHampshire, that same year (he would have been around twenty-six),2 95 andbecame the Hawkins's family doctor around 1914.% He served as a surgeonand a first lieutenant in the United States Medical Service during World WarI and was stationed at the Base Hospital at Camp Merritt, New Jersey.2 97

He returned from the service in 1919.z9s He had seen some skin graftingdone at the hospital during the war and had even done some himself, but"[n]ot a great deal.""

There is no evidence in the trial testimony that Dr. McGee learned ofGeorge's scar before Dr. McGee served in World War I. Also, the Hawkinsfamily members' assertion that Dr. McGee told George and Charles that hehad grafted skin on German soldiers in Germany during the war, and thenrecanted, has no support in the record.3 * Rather, Dr. McGee was stationedin New Jersey during the war, and testified (without impeachment)that he had performed some skin grafting (though not to the level of

294 Transcript of Record, supra note i8o, at 67.295 Id.

296 Id. at 17,30.

297 Id. at 68.

298 Id. at 82.

299 Id.

3oo Roberts, supra note 129, at 7.

36320IO-20III


complexity required for George's operation).30 ' Had Dr. McGee madesuch a misrepresentation (regarding performing skin grafting on Germansoldiers), George's lawyer surely would have asked George, Charles, andDr. McGee about this claim.

Additionally, there is no support in the trial testimony for the assertionthat Dr. McGee encouraged Charles and George to have the operation forthree years. Rather, Charles took George to see Dr. McGee in August orSeptember 1921,302 and the operation likely took place in January 1922.303Accordingly, the assertion that there was a multi-year campaign of pressureby Dr. McGee is incorrect.

What was said during that meeting in August or September 1921 wasdisputed at trial. Although Charles denied wanting to have an operationdone at that time, " he admitted that without any suggestion from Dr.McGee, he asked Dr. McGee to look at George's hand and to providean opinion as to what Dr. McGee could do in regard to an operation totake off the scar.3 0s Charles testified that he was only seeking informationfor the future so that he would be educated when he was ready to havethe operation performed.3 * He admitted, however, that he anticipatedhaving the operation done at some time.o' On cross-examination, Charlescontradicted this harmful testimony, stating that he did not have anyintention of having the operation done at all because George was "workingevery day ... earning pretty good money," and there was no real need for anoperation. 0 George testified that he did not intend to have the operationdone at that time.3 0 What is undisputed, however, is that Charles (not Dr.McGee) broached the subject of an operation to correct George's hand.

At that meeting, Dr. McGee looked at George's hand. 31 0 Charles andGeorge testified that Dr. McGee examined it and responded that it was"a simple operation [that] could be done very easily," but that he was notundertaking any surgical work at that time, and that Charles should takeGeorge to see Dr. Tappan Pulsifer and he would do the job.3 " (Dr. McGee

301 Id. at 82.

302 Id. at 35,45, 68, 70, 8o. Charles testified that he was seeing Dr. McGee around 1922,

and that he took George to see the doctor about his hand. Id. at 4.

303 Id. at 10, 29,36.

304 Id. at i i.

305 Id. at 4, 11, 15, 68, 70, 8o. George testified that Charles never suggested an operationto Dr. McGee, id. at 45, but that testimony cannot be believed considering Charles admittedbroaching the subject with Dr. McGee. Id. at 4, 11, 15.

3o6 Id. at i i.

307 Id.

3o8 Id. at 13.

309 Id. at 5 i.310 Id. at68.

311 Id. at I1,35,46-47,51-

364 [Vol. 99


denied ever having given up surgery for a period of time."') Charlestestified that he responded that he did not want the job done now; he justwanted to find out what could be done (which seemingly contradicted histestimony that he was not interested in having it done at all)."' Charlestestified that Dr. McGee replied that he would like him to see Dr. Pulsiferto look at the hand anyway. 3 14

Dr. McGee testified that Charles told him that George's hand wasbothering him at work and with hunting or shooting, that it was "gettingworse all the time," and that he would like to have it operated on to havethe scar removed." This was supported by testimony from Edward JamesHalloran, George's foreman at the mill.1 6 As previously noted, Hallorantestified that when he complained to George about his work performance,George said that he was "doing the best he could," and that he wanted toearn money to have an operation." This is also consistent with Charles'sadmission that he broached the subject of the hand with Dr. McGee, andis further consistent with the medical testimony that George's hand wouldhave been contracting as he grew older.

Dr. McGee asserted that he told Charles that a skin graft could beperformed on George, and explained to him the procedure, including thefact that sometimes the graft does not heal.1 Dr. McGee testified thathe had never performed an operation exactly like this before," and headmitted on cross-examination that he would like to learn32 0 and wasnaturally interested in such an operation.32 ' He testified that he told themhe could do the operation, but that they should go to Boston or New Yorkto see someone who performed such procedures. 3 2 He also denied tellingthem it was a simple operation.3 3 He testified that he did not want toperform the operation because such operations require significant attentionand several operations324 and because the results of such an operation areuncertain.3 5 Dr. McGee denied telling them at that meeting to see Dr.

312 Id. at So.313 Id. at 4, ii.

314 Id. at 4,II, 13.

315 Id. at 87.

316 See id. at io9.

317 Id.

318 Id. at 70-71.319 Id. at 82,90.

320 Id. at 82.

321 Id. at 9o.

322 Id. at 70,80.

323 Id. at So.324 Id. at 70.

325 Id. at 81.

20IO-20II11 365


Pulsifer.3 16

While the jury apparently believed that Dr. McGee had promisedGeorge a one hundred percent perfect or good hand, the evidence doesnot reveal a doctor obsessed with experimenting with skin grafting andmisrepresenting his qualifications to encourage Charles and George toconsent to the operation. To the contrary, Charles broached the subjectof an operation to correct George's handm3 which suggests that the handbothered George, either physically or aesthetically, more than he admittedduring trial. The fact that Dr. McGee recommended that George see adifferent doctor (either Dr. Pulsifer or a doctor in New York or Boston,depending on whose version is believed 1 8 ) further suggests that Dr. McGeewas not pursuing George so that he could experiment with skin grafting.Although Dr. McGee might have solicited the work between August/September 1921 and the operation in January 1922, perhaps even makingthe operation seem easier than it was, and although he was intrigued bythe chance to perform the operation, the trial testimony does not comportwith the traditional description of Dr. McGee. The theory that Dr. McGeewanted to experiment with skin grafting was simply a theory advancedby George's lawyer in a question posed during trial to Dr. McGee.329 Also,had there been substantial evidence that Dr. McGee simply wanted toexperiment with skin grafting, one would think that his reputation in Berlinwould have been damaged such that it would have been unlikely that hecould thereafter be elected mayor.

3. The Hairy Hand.-Several facts suggest that the condition of George'sright hand after the operation might not have been as bad as commonlythought. For example, the description of the post-operation hand comesfrom the writ filed by George in his lawsuit, and it is likely that George'slawyer would have described the hand's condition in as grotesque a fashionas possible. Also, we know that the jury did not award a particularly largesum of money ($3,000), and the trial judge felt that any amount above

326 Id. at 8o-8i. Charles and George testified that they visited Dr. Pulsifer, a physicianand surgeon in Berlin who apparently had a busy practice. Id. at 15, 35,47. Charles asked himwhat he could do in regard to removing the scar. Id. at 14. Charles and George testified thatDr. Pulsifer told them that it was a very simple operation that could be done very easily. Id.at 35, 47. Whenever Charles was ready to have the operation, he was to notify Dr. Pulsiferand he would do it for him. Id. at 4, 10-1I, 14, 26,47. Dr. Pulsifer did not say anything aboutguaranteeing the result of the operation. Id. at ii. Charles and Dr. Pulsifer did not discussthe cost of the operation. Id. at 15. Charles did not report back to Dr. McGee about Pulsifer'sopinion. Id. at 14. George testified that he did not have any intention of having the operation.Id. at 35-36.

327 Id. at 4.

328 Id. at 4, 70, 8o.

329 Id. at 82.

366 [Vol. 99


$500 was excessive.o30 We also know that the trial judge ordered a nonsuiton George's negligence claim,331 which means that the evidence wasinsufficient to support a finding that Dr. McGee had acted carelessly.3 2

It seems that the more damaged the hand after the operation, the moredifficult it would be to direct a nonsuit on the negligence claim.

The trial testimony indicates that the condition of George's hand mightnot have been significantly different from what would be expected fromsuch an operation. 33 Yes, the hand did have hair on it,3M which Georgesurely did not expect (and Dr. McGee did not assert that he made Georgeaware of this risk). And it also had excessive skin.335 After surgery, graftedskin shrinks so doctors must use enough skin to ensure the area from whichthe skin tissue was removed remains covered.3 6 It is undisputed that thegrafted skin did not shrink enough to avoid leaving an excess.3 Thus,there seems to be little doubt that aesthetically the hand was worse afterthe operation than it had been before.

But this is only conclusive evidence that the operation was unsuccessfuland the hand was worse than before if the only goal of the operation wasto improve the hand's appearance. If one of the goals of the operation, andperhaps the primary goal, was to relieve the hand of its contracted condition,it is not so clear that the hand's condition worsened. To fully assess thepost-operation condition of the hand, an analysis of the operation and theresulting condition of the hand is necessary.

Dr. McGee testified that the procedure included three operations. 338 Hetestified that during the first operation, he cut off George's scar, which wasdifficult to do because it was attached to tendons, and he cut out down "tothe healthy tissue as much as possible."33 Dr. Marks confirmed that duringthe first operation the deep cord that ran across the palm was removed.3

,

The second operation took place about a week after the first operation.MuDr. Marks did not participate in the second operation;342 rather, Dr. Tappan

330 McGee v. U.S. Fid. & Guar. Co., 53 Fad 953, 955 (ist Cir. 1931); Hawkins v. McGee,146 A. 641, 644 (N.H. 1929).

331 Transcript of Record, supra note I8o, at I; U.S. Fid. &Guar, 53 F2d at 954; Hawkins,146 A. at 644.

332 BRYAN A. GARNER, A DICTIONARY OF MODERN LEGAL USAGE 596 (2d ed. 1995).

333 Transcript of Record, supra note I8o, at 78, 91.

334 Id. at 40.

335 Id. at 91.

336 Id.

337 Id.338 Id. at 75.339 Id. at 71.

340 Id. at 121.

341 Id. at 37.

342 Id. at 122.

20IO- 20II) 367


Pulsifer assisted. 3? The purpose of the second operation was to graft theskin from George's chest onto his right hand where the scar tissue had beenremoved.3" To make sure that the skin graft properly attached to George'shand, it was necessary to attach the hand directly to the skin on his chest.34Dr. McGee testified that the purpose of the third operation was to detachthe hand from the chest. 6 He testified that once the flap of skin attachedto the hand had been there long enough to establish new circulation, theflap was then completely removed from the chest and fully attached to thehand."4

It is undisputed that the post-operation hand had excessive skin onit,m and interestingly, it was the excessive skin-not the hair-that wasthe focus of the trial. Thus, although the hair on the hand was an issue,the primary issue with respect to the so-called burned and hairy hand wasneither its burn (which admittedly had been removed) nor its hair (whichlikely was not excessive; otherwise it would have been a more significantissue at trial).

The excess skin was referred to at trial as a "bunch," and the bunch was"largely skin and fat [with] some connective tissue in it, and ... a little scartissue."349 As demonstrated below, the primary issue with respect to thebunch was whether it was a "big bunch" or a "little bunch."

Dr. McGee felt that the operation had an "exceptionally good result,"despite the excess skin (and the hair).3 0 He testified that he felt the handdid not look any worse than it did before the operation, except possibly forthe "little bunch" (as he described it).35 ' He stated that there was a place ona finger that "bulge[d] out" that could not be attended to immediately, untilit was seen how much of the flap would shrink and before the nourishmentfor the flap was established . 3 He asserted that although there was a littletoo much skin on the hand after the operation, it is the practice to havetoo much .3 3 It is preferable to have too much rather than too little becausethere is always shrinkage after the operation.35 4 He testified that "there isalways more or less of a bunch [in the palm of the hand] where there is a

343 Id. at 130.

344 Id. at 122.

345 Id. at 123.

346 Id. at 75.347 Id

348 Id. at 91.

349 Id. at 96.

350 Id. at 76.

351 Id. at 79.

352 Id. at 76.

353 Id. at 83.

354 Id

368 [Vol. 99


graft."3"s He stated that he did not know "how much shrinkage there wouldbe" or "how long it would take."s3 6

Dr. McGee testified that he anticipated that it might be necessary tohave a further procedure to get the bunch reduced."' He stated that theprocedure involved making a slit and removing the surplus tissue, thoughhe admitted that there would still be a bunch of some kind and there wouldstill be hair."5 He testified, however, that after the operation with the slit, itwould look better than it had before.359 He also asserted that with an injuryas deep as George's, it would be impossible to have a graft that left the skinsmooth.36 He testified that he achieved the result he expected from theoperation, and that he anticipated that George would let him "finish the

job."61

Dr. William H. Leith, a witness called by Dr. McGee, testified thatthe result of the operation was "[a] good result so far as it has gone," andthat because the graft had not "shrunken as much as might be hoped oranticipated," there remained some superfluous skin that needed to beremoved to complete the operation, and that it would not be a difficultprocedure. 362 The procedure Dr. Leith recommended was different fromthe operation suggested by Dr. McGee, and if feasible, involved removinga portion of the bunch to "flatten it."3 63 Dr. Leith testified that such anoperation would not require George to remain in the hospital, the handwould heal in about ten days, and he could work with it several weekslater.36 Dr. Leith also testified that it is customary to cut an over-size graftbecause it will shrink during healing, but that one cannot know for sure howmuch it will shrink. 6 He further testified that the hand looked healthy andhad a good blood supply.3 *

Dr. Marks, who had inspected the hand, testified that he did not recall"any great lumps in the palm of his hand," and the only "lump" he recalledthat was noticeable was "one that exist[ed] at the base of the second finger,where the stump of the flap was left."3 67 The lump existed because "[tihereis naturally around the margin of the skin flap ... a rough edge there where

355 Id. at 88.

356 Id. at 84.

357 Id.358 Id. at 78.

359 Id. at 79-80.

360 Id. at 88-89.361 Id. at 78.

362 Id. at 91.

363 Id. at 96-98.

364 Id. at 98-99.

365 Id. at 91.

366 Id. at 99.

367 Id. at 122.

2o1o-20II1 369


that joins the normal skin of the hand," and "because [his] margin willleave a slight ridge." 3 He testified that a "simple" operation was neededto take out some of the fatty tissue at the base of one of the fingers tomake it smooth3 9 Dr. Pulsifer also testified that an additional operationwas needed to remove some of the fat and that it would be simple.37 0

In contrast to Dr. McGee's testimony regarding the post-operationcondition of the hand, George testified that when he saw his hand, he feltit looked so bad he asked Dr. McGee to cut it off.37' Charles described theexcess skin as a "big bunch.""' George's attorney referred to it as "a bunchof skin with hair growing on it" in the palm of the hand.373 George statedthat it had hair on it, "the same as the hair on [his] chest," and the hairkept growing.7 4 Rose claimed that it looked "much worse" than beforethe operation.3 5 George testified that there were also marks on the handwhere there had been stitches used to attach the hand to his chest.37 6 Hestated that these marks were noticeable after the operation, but that theyhave "golnel down some" with time." William E. Sawyer asserted that thehand looked "[flar worse" than it did before the operation.3 8 Dr. Pulsiferconfirmed that the hand had hair on it, but that it did not hurt him to havehair on his palm.37 9 He also testified that skin is taken from wherever it iseasiest, and that the chest is a "common place" from which to get skin for agraft.380

Charles testified that he asked Dr. McGee about the bunch, and McGeetold him that it was nothing, and it would heal and then "go down in time,"perhaps in a year.38 1 George also testified that Dr. McGee told him that"the bunch was going to work down to the same level as the rest of thehand."382 Dr. McGee testified that he probably told George that it wouldshrink some and to "come in and see [him] once in a while" so he could"see how it was doing."8 3 George testified that the hand healed, but the

368 Id.

369 Id. at 124.

370 Id. at 131.

371 Id. at 38.

372 Id. at 7.373 Id. at 88.

374 Id. at 4o.

375 Id. at 33-376 Id. at 4o.

377 Id.378 Id. at 67.

379 Id. at 132.

380 Id. at 133.

381 Id. at 7, 25 (internal quotation marks omitted).

382 Id. at 39.

383 Id. at 85.

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bunch did not go down."* Charles similarly testified that the bunch neverwent down."' He testified that Dr. McGee ultimately said he was "all donewith the hand" and there was "nothing more that he could do for it." 3 Dr.McGee testified that he felt the bunch had reduced since the operation,and had even reduced since the first trial in April.387

Interestingly, after the operation, George visited Edward Halloran oneevening at Halloran's house, which was the first time Halloran had seen himsince the operation.3 88 Halloran asked him how his hand was coming, andGeorge replied that it was doing "first rate" or that it was better.3 * Hallorantestified that George showed him his hand and said that Dr. McGee had"done well."3" George told Halloran that he had to have another operation,and that he had not gone back for it yet.91 George, however, denied tellingHalloran that he was going to have another operation.3 11

Thus, with respect to the appearance of George's hand after theoperation, it is undisputed that it had a "bunch" consisting of excess skin,and that the bunch had hair on it. The size of the bunch was emphasizedby Charles and George and deemphasized by Dr. McGee. Of course, thejury surely saw the hand (though the transcript does not indicate that thejury inspected it). Based on the jury's award of only $3,000 (an amount theHawkins family later felt was small), the judge's decision that any amountin excess of $500 was excessive, and George's subsequent agreement tosettle for only $1,400, it is likely that the "bunch" was not as grotesque,either in terms of the amount of excess skin or the amount of hair on it, ascommonly thought. Although George's sister later stated that she believed"the jurors, while at heart solidly behind the Hawkinses' cause, were afraidto return heavier damages against McGee because he was one of the moreprominent physicians in the area," 93 the small verdict combined with thejudge's opinion and George's decision to settle for a small amount suggestthat a more reasonable explanation is that the hand's condition was not asbad as commonly portrayed.

Concerning the contracted condition of George's hand, Dr. Leithtestified that after the operation George could extend all of his fingersexcept one, which "lack[ed] about ten degrees of full extension, due to a

384 Id. at 40.

385 Id. at 12, 25.

386 Id. at 12, 21, 23, 26.

387 Id. at 84.

388 Id. at i i , 115.

389 Id. at 115-16.

390 Id. at i ii.

391 Id. at I I6.

392 Id. at 136.


20IO-20II11 371


little contraction of the scar" still on the hand." He testified that Georgecould move all of his fingers and that "he [could] proximate the thumb toeach of the fingers all the way across, and [that] he ha[d] a good, firm grasp,so that the mobility of the hand ha[d] been very much improved by theoperation."395 Dr. Pulsifer testified that George had "better tensions in hishand" at the time of the second trial than he had when Pulsifer examinedhim. 9 6 Importantly, George did not offer any evidence that his hand'scontracted condition had not been improved as a result of the operation.Accordingly, to the extent Charles and George wanted the operation torelieve the hand of its contracted condition, the operation was successful.

In regard to the usefulness of George's hand after the operation, thetestimony focused primarily on whether George's hand was more sensitiveafter the operation, and it appears undisputed that it was. Dr. McGeeadmitted that you could not expect the palm to be as tough as it wasoriginally because it is a different kind of tissue."9 Rose testified that foractivities that require a strong grip, George could only do them for a certainlength of time, perhaps an hour, or his hand would get "raw,"398 and that shehad seen it bleed "several times."3

9

George testified that after the operation he was not able to performthe same work as he had before the operation without injuring his hand. 0

Mark T White, the loading foreman in the sulphite department at theBrown Company Cascade Mill," corroborated this testimony, stating thatGeorge's hand would prevent him from performing that type of work.40William E. Sawyer also asserted that he did not think George's hand wouldpermit him to do the previous work he had done ."3 George testified thatthe "skin would peal [sic] off and become raw ... a yellow matter [would]run out of it," and it would take three or four days to heal.'

George testified that it was six months before he felt he could returnto work after the operation.4"' He stated that he returned to his old job butin a promoted position in the weighing department. White testified that

394 Transcript of Record, supra note i8o, at 92.

395 Id. at 93-

396 Id. at 133.

397 Id. at 79.

398 Id. at 32-33.

399 Id. at 33.400 Id. at 40.

401 Id. at 6z.

402 Id. at 63.

403 Id. at 67.

404 Id. at 40.

405 Id. at 43.

406 Id. at 43, 53, 134.

372 [Vol.gg9


he gave him the job because of his hand," and that the work was "clerical[and] office work."" George asserted that at times he would help out hisforeman and do the work he did before, but that he could only do it forten or fifteen minutes before his hand became "sore and raw."' Whitealso testified that he asked George to help him out with some loading and"it pulled th[e] surplus flesh down so that it ... tore it from the palm ofhis hand." 410 White testified that George worked at the mill until aroundNovember 1924411 and was terminated because he did not attend to hiswork. The termination had nothing to do with his hand.4

12 George asserted

that he also had problems at a subsequent job, and his hand would becomeraw and a "running matter" would come out of it, and it would take threeor four days to heal. 4 13

George testified that after the operation he was also unable to shoot arevolver with his right hand because the bunch would prevent him fromgetting a "grip on the revolver butt," and his index finger could barelyreach the trigger, preventing him from holding the gun steady.4 14 He wasalso allegedly unable to handle a rifle as well as before the operation. 41 sGeorge also testified that he could probably not carry a heavy pail of waterwith his right hand anymore, 4 16 and that he was unable to lay his right handflat against his knee. 4

17 He testified that his hand bothered him when skiing

and that he could not chop wood.418 He admitted that he drove a car, buttestified that it bothered him to shift because the bunch was in the way,though he could steer with his left hand.4 19 Robert H. Reid testified thathe saw George on skis in January 1925, but he did not think George couldcompete in an annual ski race due to his hand.420 William E. Sawyer statedthat he saw George cranking up a motor boat, and that it left George's hand"bruised and bleeding" where the skin was grafted. 42

1

An encounter between George and Ms. Wight (the neighbor) after thefirst trial, during which George showed Wight his hand, was a matter of

407 Id. at 63.

408 Id.

409 Id. at 53.410 Id at 63.

411 Id. at 64.

412 Id.

413 Id. at 43-44.

414 Id. at 41, 53.

415 Id. at 42.

416 Id.

417 Id. at 42-43.

418 Id. at 53.419 Id.

420 Id. at i19.

421 Id. at 67.

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dispute. Around the last week in May or the first week in June 1922, Georgepassed Wight as he was walking along the sidewalk. 422 He greeted her and"went perhaps [twenty-five] or [thirty] feet and stopped and looked backat [her]," and asked if he could show her something.423 She agreed, and hecame back and told her that he wanted to show her his hand." He told herthat he had just bought a new car, and "there had been quite a bit of workto do on this new car, and he had scratched his hand while he was workingon the car."425 Wight testified that the hand had "improved greatly" sinceshe examined it at the trial in April,4 26 and that it was "not bleeding."427 Shetestified that "[h]e had one little scratch about a quarter of an inch long,"and that she spoke of "putting something on it, and he said it didn't needit, . .. it was nothing; it would heal up."4 2 George testified that this eventoccurred, but that his "hand was raw in places, and [a] kind of matter [was]running out of it," and it was bleeding as a result of working on his carthat morning.42 9 It seems likely that George's hand had suffered some harmfrom the work on the car or else George would not have asked Wight tolook at it.

George testified that his hand was a source of embarrassment, in thatif he met someone for the first time and went to shake hands, the personwould want to know what was in his hand.43 0 It was especially embarrassingto George when he met a woman. 43

1 The "fellows" would also makejokes about his hand,432 and he never "had any trouble like that beforethe operation." 433 The Hawkins family later stated that George's parentsencouraged him to return to school but he was too embarrassed, whichmight well have been true.4

3 There was not, however, any testimony to thiseffect, and George had apparently quit school and started working priorto the operation.435 It is certainly possible, however, that if his hand wasexcessively sensitive and prevented him from performing manual labor, hisparents may have encouraged him to return to school.

In conclusion, with respect to the hand's post-operation condition, its

422 Id. at ioi.

423 Id.

424 Id.

425 Id.

426 Id. at io2.

427 Id. at 103.

428 Id.

429 Id. at 135.

430 Id. at 45.

431 Id.

432 Id.

433 Id.


435 Transcript of Record, supra note i 8o, at 34.

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appearance was surely worsened, and its sensitivity likely increased. But itscontracted state was likely improved.

C. The Real Story

An analysis of the trial testimony, combined with the other availableinformation, suggests that the following is a more accurate description ofthe events surrounding Hawkins v. McGee than those commonly provided.The burn suffered by George in 1914 was a third-degree burn, and soserious that Charles filed suit against the responsible utility company andtook George to Montreal to determine if anything could be done to restorethe hand. The doctors in Montreal recommended against taking any action,and over the years the fingers on George's hand drew inward because thehand grew but the scar tissue did not. Although there is not substantialevidence that the contracting nature of the hand caused George seriousproblems, the hand was continuing to contract as he aged and was perhapscausing him increasing difficulties. As a result, Charles inquired of Dr.McGee as to whether anything could be done to correct the problem.

Charles and George, when speaking with Dr. McGee, probablyemphasized the contracted condition of the hand, and there was likelylittle discussion about the hand's appearance (or improving it). Dr. McGeetold Charles and George that there were better persons to perform suchan operation than he, but a few months later they agreed that Dr. McGeewould perform the operation. Dr. McGee might have encouraged Charlesand George to have the operation, but it would have been over the courseof four or five months, not three years as was later alleged by the Hawkinsfamily.

Dr. McGee most likely did a poor job of warning Charles and Georgeabout the seriousness of the operation; about having to use excess skinthat might not shrink to a perfect fit; about chest skin being more sensitivethan the skin originally on the hand; and about the possibility of havinghair on the grafted skin. (There is no evidence in the record, however, thatDr. McGee told Charles and George that he was going to use skin fromGeorge's thigh, as was later alleged by the Hawkins family.) Dr. McGeemight not have been as forthcoming as he should have been because hewas intrigued with the possibility of the operation, but he did not pursueCharles and George so that he could experiment with skin grafting.

The operation was successful with respect to relieving the hand of itscontracted state. With respect to how the hand looked, it was surely worsethan before: George traded scar tissue for excess skin with hair. It was alsolikely more sensitive than it had been before, which might have made itdifficult for him to engage in manual labor or other similar tasks. Thus, aburned and contracted hand was replaced with a hairy and sensitive hand.And, there is no testimony in the record indicating that Dr. McGee warned

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Charles and George that even if the operation was a success with respect torelieving the hand of its contraction, it might look worse and be sensitive.

Thus, I suspect that Hawkinsv. McGee is not about an incompetent doctor(remember, the trial judge ordered a nonsuit on the negligence claim) whopursued a patient for years, saying whatever was necessary to convince thepatient to undergo an unnecessary and undesired surgery so that the doctorcould experiment with skin grafting. Rather, I suspect that it is a case of apatient who wanted to fix a problem with his hand and a doctor who failedto effectively communicate some significant side effects that might result.Accordingly, the popular perception of the facts, gleaned from The PaperChase and Jorie Roberts's interview with Hawkins family members, is likelywrong.

Rather, the case was probably about a misunderstanding. If Dr. McGeepromised George a one hundred percent perfect or good hand, Georgelikely thought Dr. McGee meant perfect in all respects, but Dr. McGeelikely meant perfect with respect to relieving the hand of its contractedcondition. Presumably a reasonable person would have interpreted Dr.McGee's alleged promise to mean perfect in all respects, so under theobjective theory of contracts Dr. McGee would be liable for breach. Butwe are still left to answer Professor Kingsfield's question to James Hart inThe Paper Chase: "[W]hat sort of damages do you think the doctor shouldpay?"43 6 As discussed in Part I of this Article, I think he should pay thedifference between George's post-operation hand and what Dr. McGeeintended to promise him (or an amount based on George's reliance interest,whichever is greater).

CONCLUSION

This Article has shown that when there is a misunderstanding withrespect to what has been promised under a bargained-for exchange contract,the remedy for breach should be based on what the promisor intended topromise. An award based on the objective theory of contracts cannot bejustified on either deontological or consequential grounds and is thereforeunwarranted.

Under the exception to the general rule of damages this Article proposesfor cases involving contractual misunderstandings, the most famous caseinvolving expectation damages-Hawkins v. McGee-was wrongly decided.George Hawkins should have been entitled only to the difference in valuebetween his hand prior to the operation and the post-operation condition ofthe hand as Dr. McGee intended to promise. Accordingly, any negative sideeffects of the operation (such as the hair and additional skin) should not havebeen taken into account when measuring damages. If, however, the reliance

436 THE PAPER CHASE BOOK, supra note 2, at 7 (internal quotation marks omitted).

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interest would have provided for a greater recovery, Hawkins should havebeen entitled to the difference between the condition of his hand beforethe operation and the condition of his hand after the operation. 437 AlthoughMcGee was likely to blame for the misunderstanding, the availability ofthe award proposed by this Article will be sufficient incentive for promisorsto act carefully when using promissory language.

437 Thus, let us assume (as I think was true) that Dr. McGee intended his alleged refer-ence to a one hundred percent perfect or good hand to relate solely to the hand's contractedstate, and let us assign a value of "io" to a hand with perfect flexibility. If George's handprior to the operation had a value of "6," and after the operation it had a value of "9," Georgewould be entitled to damages based on the difference between a hand with a flexibility of "9"and a hand with a flexibility of "io." If, however, the difference in value between the post-operation hand and the value of the promised hand based on an objective interpretation ofthe promise (which would likely include its appearance and its sensitivity) was greater thanthe difference between a hand with a "9" flexibility and a "io" flexibility, this larger amountwould be awarded.

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expectation damages, the objective theory of contracts

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